If firms are earning economic profit in a monopolistically competitive market, which of the following is most likely to happen in the long run?
A) Some firms will leave the market.
B) Firms will join together to keep others from entering.
C) New firms will enter the market, thereby eliminating the economic profit.
D) Firms will continue to earn economic profit.
C
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Which is the most likely reason why more young people from low-income regions are more likely to join the military, compared to those in high income regions?
A) They are more easily pressured by recruitment officers. B) Their opportunity costs are relatively lower. C) They are more patriotic than their richer counterparts. D) They are, to put it bluntly, more foolish than their richer counterparts.
Answer the following questions true (T) or false (F)
1. When the Federal Reserve increases the money supply, people spend more because they now have more money. 2. The dynamic aggregate demand and aggregate supply model accounts for the price level rising every year. 3. Expansionary monetary policy enacted during a recession will cause the inflation rate to increase.