Under what conditions would an increase in market demand lead to the same long-run equilibrium price?
A. Potential new firms in the market are not attracted by economic profits.
B. The firms in the market are part of a constant-cost industry.
C. The firms in the market are part of an increasing-cost industry.
D. The firms in the market are part of a decreasing-cost industry.
Answer: B
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During the late nineteenth century, the gold standard was a subject of controversy. Why?
A) Businesses resented fixed exchange rates because of their inability to raise or lower prices. B) Gold flows were erratic and resulted in a series of large economic swings—booms and busts. C) Prices were stable and predictable, but profits fell. D) Governments cheated on printing money, causing inflation problems all over the world.
Real GDP is the value of goods and services
A) adjusted only for unanticipated inflation. B) adjusted only for anticipated inflation. C) using base-year prices. D) using current-year prices.