Which of the following forces does not play a major part in the adjustments of a monopolistically competitive industry toward its long-run equilibrium?
A. profits/losses making firms enter or exit the industry
B. firms expanding or shrinking their productive capacity
C. introduction of new products and patents
D. shifts in the demand curves of individual firms as the industry expands or contracts
Answer: C. introduction of new products and patents
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Everything else held constant, an autonomous easing of monetary policy will cause
A) aggregate demand to increase. B) aggregate demand to decrease. C) the quantity of aggregate demand to increase. D) the quantity of aggregate demand to decrease.
In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, an increase in the reserve requirement ________ the ________ for reserves and causes the federal funds interest rate to
rise, everything else held constant. A) decreases; demand B) increases; demand C) increases; supply D) decreases; supply
The demand curve a monopolist uses in making an output decision is
a. the same as the demand curve facing a perfectly competitive firm b. vertical because there are no close substitutes for its product c. horizontal because there are no close substitutes for its product d. the same as the market demand curve e. perfectly inelastic
If parties to a contract can anticipate the court's decision in the event of a dispute with some degree of certainty:
a. opportunistic behavior will never be detected. b. opportunistic behavior will be partially detected. c. there will be less room for opportunism. d. only one of the parties will be able to act opportunistically.