The freedom of entry and exit in monopolistic competition means that firms
A) enter the market when economic losses are being suffered.
B) exit the market when economic profits are being earned.
C) enter the market when normal profits are being earned.
D) can enter a market to compete for economic profits and leave when economic losses are being incurred.
E) find it easy to permanently earn an economic profit.
D
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Suppose Mack's wage was $7.00 an hour in 2001 and was $12.00 per hour in 2012. The CPI was 94 in 2001 and 201 in 2012. The 2001 wage in terms of 2012 dollars is
A) $13.16. B) $7.00. C) $14.97. D) $14.07. E) $3.48.
Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 10% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money can, in the theoretical limit,
A) increase the money supply by a little more than $1,000. B) increase the money supply by a little less than $1,000. C) increase the money supply by only $1,000. D) increase the money supply by $10,000.