If people work less as the wage rate increases, their labor supply curves are backward bending

There are three leading manufacturers of smart phones in Techland. Their products are considered to be perfect substitutes

a) Will these firms earn zero economic profits in the long run? Explain your answer. b) What can the firms do to earn maximum profit?

If an increase in expected inflation equally raises the nominal interest rate, the expected real interest rate ________ and thus investment demand ________

A) rises, increases B) rises, decreases C) is unchanged, is unchanged D) falls, increases E) falls, decreases