If a typical firm in a perfectly competitive industry is earning profits, then
A) new firms will enter in the long run causing market supply to increase, market price to fall, and profits to decrease.
B) all firms will continue to earn profits.
C) the number of firms in the industry will remain constant in the long run.
D) new firms will enter in the long run causing market supply to decrease, market price to rise, and profits to increase.
A
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If workers accurately predict the rate of inflation, is there a short-run trade-off between inflation and unemployment, as predicted by the Phillips curve? Why or why not?
What will be an ideal response?
Many economists believe that stabilization policy should be limited in scope until
a. Keynesians and monetarists agree on policy. b. inflation is brought under control. c. the economy is operating near capacity. d. forecasting becomes more reliable.