What change in monetary policy could eventually cause overborrowing and overinvestment?
(A) Contractionary policy.
(B) An increase in the money supply.
(C) A fall in the discount rate.
(D) A decrease in the money supply.
Answer: (B) An increase in the money supply.
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The above figure shows the cost curves for a perfectly competitive firm. If all firms in the market have the same cost curves and the price equals $16 per unit
A) the market is in its long-run equilibrium. B) over time, firms will leave this market. C) the firm is making zero economic profit. D) over time, the price will fall as new firms enter the market.
Refer to Scenario 1 . If you start the course in such a way that each exam score is worse than your previous average what should happen to your average score? What would happen to your average if the next exam score was larger than your previous exam
score? Explain.