In a market economy, who or what determines who produces each good and how much is produced?

The freedom of entry and exit in monopolistic competition means that firms

A) enter the market when economic losses are being suffered. B) exit the market when economic profits are being earned. C) enter the market when normal profits are being earned. D) can enter a market to compete for economic profits and leave when economic losses are being incurred. E) find it easy to permanently earn an economic profit.

According to monetarists, if the economy is initially in long-run equilibrium, an increase in the money supply will __________ the price level and Real GDP in the short run, and will __________ only __________ in the long run

A) lower; lower; the price level B) raise; raise; Real GDP C) raise; lower; Real GDP D) raise; raise; the price level E) raise; raise; the unemployment rate