The slope of the BP curve reflects the
A) ease with which capital flows across a nation's borders.
B) inflation rate of the country.
C) sensitivity of income to changes in the inflation rate.
D) ease with which the central bank can keep an exchange rate fixed.
A
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Initially, a perfectly competitive industry that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good
In the short run, the price ________, firms with the new technology make ________ economic profit, and firms with the old technology ________. A) remains the same; zero; incur economic losses B) falls; positive; incur economic losses C) remains the same; positive; make normal profit D) remains the same; positive; incur economic losses
Under a consumption-based theory of the pricing of risky assets, uncertain returns on such an asset should be discounted by a "stochastic discount factor" that takes into account: a. the mean and standard deviation of the uncertain return
b. whether the uncertain return has a normal distribution. c. both the nominal and real interest rates. d. the rate of time preference and present and future marginal utility of wealth.