A perfectly competitive firm has a horizontal demand curve because it can sell as much as it wants at the market price
a. True
b. False
Indicate whether the statement is true or false
True
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In the figure above, when the quantity of milk produced is 600 gallons per day, what is the deadweight loss?
A) $250 B) $125 C) $500 D) $50
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
According to the misperceptions theory, when the price level falls below the expected price level,
A. the economy's SRAS curve shifts up. B. the economy moves along its AD curve. C. the economy moves along its SRAS curve. D. the economy moves along its LRAS curve.
In the short run, to decrease the interest rate, the Federal Reserve ________ the quantity of money by ________ government securities
A) decreases; buying B) increases; selling C) decreases; selling D) increases; buying E) None of the above answers is correct because in the short run, the Federal Reserve cannot change the interest rate.