Consider a perfectly competitive market in which the firms are earning above-normal profit in the short run. In the long run, forces will come into play to
a. decrease market supply
b. shift the horizontal demand curve facing each firm downward
c. increase the market price
d. encourage existing firms to increase output
e. decrease the number of sellers in the market
B
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_____ has the primary responsibility for developing the early stages of the government's budget
a. The executive branch b. The Treasury Department c. The House of Representatives d. The Senate
If an economy were experiencing a high rate of unemployment as the result of insufficient aggregate demand, a Keynesian economist would favor:
A. an increase in taxes coupled with a reduction in government expenditures of equal size. B. an increase in taxes. C. a reduction in taxes, without any offsetting reduction in government expenditures. D. maintenance of a balanced budget.