Which of the following statements concerning equilibrium in the long run is not true?
a. Most firms earn economic profits in the long run.
b. The firm can vary its plant size in the long run.
c. Economic profits are eliminated as new firms enter the industry in the long run.
d. For firms in long-run equilibrium, P = MC = AC.
a
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The scientific method refers to the process by which economists and other scientists:
A) plot graphs to illustrate relationships between different economic variables. B) develop models of the world and test those models with data. C) develop models to explain the past but not to predict the future. D) collect data for further use in research.
If real interest rates are equal in two countries, then the nominal interest differential on their currencies will equal
A) the expected inflation differential. B) the risk premium. C) the forward premium or discount. D) Both A and C.