Within the framework of the AD/AS model, if a long-run equilibrium is present in the goods and services market,
a. decision makers will have accurately forecast the current price level when they arrived at resource price and loanable funds agreements.
b. the profit rates of the firms will generally exceed the competitive level.
c. the actual rate of unemployment will be less than the natural rate of unemployment.
d. output will exceed the economy's long-run sustainable output.
A
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Compared to a fixed percentage reduction regulation, a tax on pollution encourages:
A. big firms to make larger reductions because they can more easily afford it. B. firms to reduce pollution by the same percent. C. firms that can more cheaply reduce pollution to make larger reductions. D. firms to use the same technology to reduce pollution.
The most important developments that reduced banks cost advantages include
A) the growth of the junk bond market. B) the competition from money market mutual funds. C) the growth of securitization. D) the growth in the commercial paper market.
Which requirement for perfect competition rules out trade associations or other collusive arrangements in which firms work together to influence price?
A. Freedom of entry and exit B. Homogeneity of product C. Perfect information D. Numerous small firms and customers
According to the endowment effect, people are unwilling to sell a good they already own in which of the following situations?
a. if they are offered a price greater than the price they would pay if they did not already own the good b. if they are offered a price lower than the price they would have to pay to replace the good c. if they can't replace the good d. if the good was a gift that had great sentimental value