In the long run, firms in monopolistic competition produce at a level that is ________ the efficient scale of output
A) less than
B) equal to
C) more than
D) All of the above are possible depending on market conditions.
A
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The measure of market power that focuses on the share of the market controlled by the X largest firms in the market is known as:
A) the Lerner Index. B) the Herfindahl-Hirschman Index. C) the Minimum-Efficient Scale Index. D) a concentration ratio.
Which of the following statements is true of government spending?
a. An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase. b. Government spending is a part of monetary policy, not fiscal policy. c. A decline in government spending brings about an expansion in the economy. d. An increase in government spending increases the recessionary gap in the economy. e. An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.