If we observe firms earning zero economic profits in the short run, we know that
A) the industry must be perfectly competitive.
B) the industry must be either perfectly competitive or monopolistically competitive.
C) there must not be any barriers to entry.
D) any market structure is possible since firms under any market structure can earn zero profits at some time.
D
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Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the reserves account and monetary base in the context of the Three-Sector-Model? a. The reserves account falls and monetary base falls
b. The reserves account rises and monetary base falls. c. The reserves account and monetary base remain the same. d. There is not enough information to determine what happens to these two macroeconomic variables.
The cross price elasticity of demand is measured by the
A) percentage change in the quantity demanded of one good divided by the percentage change in quantity demanded of another good. B) percentage change in the price of one good divided by the percentage change in price of another good. C) percentage change in the demand for one good divided by the percentage change in price of another good. D) percentage change in the price of one good divided by the percentage change in the demand for another good.