In a perfectly competitive market, firms will exit in the
a. short run if they are suffering economic losses
b. short run if they are earning below-normal profit
c. short run if price exceeds average total cost
d. long run if they are earning above-normal profit
e. long run if they are suffering economic losses
E
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The exchange-rate arrangement that emerged from the Bretton Woods conference is often called a managed float standard
a. True b. False Indicate whether the statement is true or false
The balanced budget multiplier says that
A. An increase in government spending paid for by a tax increase of equal size has no effect on aggregate demand. B. An increase in government spending must be paid for by a tax cut of equal size. C. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand leftward. D. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand rightward.