Which of these changes is observed in an economy when a recessionary gap is closed in the long run?
a. An increase in the inflation rate and a decrease in the unemployment rate
b. An increase in the level of output and a decrease in the price level
c. An increase in both the rate of output and the price level
d. A decrease in both the rate of output and the price level
e. A decrease in the inflation rate and an increase in the unemployment rate
b
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In a monopolistically competitive industry, the firms are currently making an economic profit. When this market moves to its long-run equilibrium, the firms' demand curves will have ________ and their economic profit will have ________
A) shifted leftward; decreased to zero B) shifted leftward; decreased but remain greater than zero C) shifted rightward; decreased to zero D) remained the same; decreased to zero
An increase in both equilibrium price and quantity is a consequence of a(n): a. increase in supply
b. increase in demand. c. decrease in demand d. decrease in supply