Which of the following statements is not correct?
a. Monopolistic competition is similar to monopoly because in each market structure the firm can charge a price above marginal costs.
b. Monopolistic competition is similar to perfect competition because both market structures are characterized by free entry.
c. Monopolistic competition is similar to oligopoly because both market structures are characterized by barriers to entry.
d. Monopolistic competition is similar to perfect competition because both market structures are characterized by many sellers.
c
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Keynesians challenge the classical or monetarist view that payment schedules and patterns of spending and saving associated with the transactions demand for money are basically stable
Indicate whether the statement is true or false
Markets may fail to allocate resources efficiently when property rights are not well established
a. True b. False Indicate whether the statement is true or false