In the long run in a perfectly competitive market:
A. firms earn positive economic profits.
B. supply is perfectly inelastic when all firms have the same cost structure.
C. firms operate at an efficient scale.
D. All of these are true.
Answer: C
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A main reason why the U.S. trade deficit grew so large from 1997 to 2000 was that
A. Congress removed all tariffs and trade restrictions on imports. B. NAFTA was introduced and Mexican exports flooded the United States. C. the international value of the dollar fell during the 1990s, which encouraged U.S. exports. D. the international value of the dollar rose in the last half of the 1990s, which encouraged U.S. imports and damaged U.S. exports.
Increasing a fixed exchange rate is called a revaluation
Indicate whether the statement is true or false
To prevent the dollar from depreciating, the U.S. central bank can try to fix the currency value of the dollar when they
A) buy U.S. dollars in the foreign exchange market. B) sell U.S. dollars in the foreign exchange market. C) abandon the U.S. dollar and use another country's currency as its legal currency. D) buy foreign currencies in the foreign exchange market.
The components of a well-run incentive compensation scheme include all of the following EXCEPT
a. evaluating the identified performance measures b. avoiding rewards for outcomes that are not included in the performance measures c. demonstrating that evaluators can be influenced with small favors d. identifying the relevant measures on which to evaluate employees