As the price level in the economy increases, which of the following sequence of events occurs?
A) Md? r? I? AE?
B) Md? r? I? AE?
C) Md? r? I? AE?
D) Md? r? I? AE?
Answer: C) Md? r? I? AE?
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A market failure arises when an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event
Indicate whether the statement is true or false
Under conditions of oligopoly, economies of large-scale production mean that: a. firms are able to sell all of the output they desire
b. it is difficult for a firm to determine its profit-maximizing price and output. c. large firms would find it more profitable to break up into smaller production units. d. small firms are at a disadvantage in competing with relatively large firms.
The supply curve of a depletable natural resource is usually
a. downward sloping because the resource runs out over time. b. upward sloping because more of the resource can be profitably extracted at higher prices. c. upward sloping because the price of the resource rises over time. d. vertical because the supply of the resource is fixed.
The Fed has recently paid interest on the required and excess reserves that banks hold.
Answer the following statement true (T) or false (F)