In the long run, monopolistically competitive firms can make an economic profit because of product differentiation

Whenever there is excess demand for real balances, short-run adjustment occurs because:

a. savers and investors buy bonds and drive up their prices (drive down nominal rates of interest). b. investors and borrowers sell bonds (convert to cash) and drive down their prices (drive up nominal rates of interest). c. the price level falls to restore real balances. d. aggregate demand is decreased to restore equilibrium.

Due to diminishing marginal returns, the ultimate source of economic growth in the United States from 1949 to 2010 has been

A) capital. B) labor. C) total factor productivity. D) Capital, labor, and total factor productivity are all subject to diminishing marginal returns, and therefore are all equally responsible for economic growth.