In the long run, a perfectly competitive market will
A) produce only the quantity of output that yields a long-run profit for the typical firm.
B) generate a long-run equilibrium where the typical firm operates at a loss.
C) supply whatever amount consumers demand at a price determined by the minimum point on the typical firm's average total cost curve.
D) supply whatever amount consumers will buy at a price which earns the market an economic profit.
C
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According to the new Keynesian school of thought, fiscal policy is a completely ineffective tool in combating supply-side shocks
a. True b. False Indicate whether the statement is true or false
Tax cuts would have the same directional effect on the dynamic aggregate demand curve as:
A. decreases in government purchases. B. temporary tax increases. C. the Federal Reserve selling U.S. treasury securities. D. the Federal Reserve buying U.S. treasury securities.