For Keynes, the most important determinant of employment and output is/are
A. interest rates.
B. aggregate supply.
C. aggregate demand.
D. the level of inventories.
C. aggregate demand.
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If marginal revenue and marginal cost are not equal, profit can be maximized by
a. increasing output if MR > MC. b. decreasing output if MC > MR. c. moving to the output where the slopes of TR and TC are equal. d. All of the above are correct.
The entry of new firms into a monopolistically competitive industry will cause the long-run equilibrium price to rise.
Answer the following statement true (T) or false (F)
The nominal exchange rate is 90 Pakistani rupees per dollar. The price of a shirt in Pakistan is 1800 rupees. The same shirt sells for $25 in the U.S. A. What is the real exchange rate? Show your work. B. Can arbitragers make a profit? C. If your answer to C is yes, where would they buy and where would they sell?
Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost:
A. firm 2 will enjoy higher profits. B. firm 1 will reduce its output. C. firm 2 will gain market share. D. All of the statements associated with this question are correct.