All of the following characteristics are common to both monopolistic competition and perfect competition except
A) firms act to maximize profit.
B) firms take market prices as given.
C) entry barriers into the industries are low.
D) the market demand curves are downward-sloping.
B
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In the Friedman-Lucas money surprise model, a surprise increase in money supply growth
A) has no effect on inflation. B) increases inflation less than in proportion to the growth rate of the money supply. C) increases inflation in an equal proportion to the growth rate of the money supply. D) increases inflation more than in proportion to the growth rate of the money supply.
The analysis of competitive firms sheds light on the decisions that lie behind the
a. demand curve. b. supply curve. c. way firms make pricing decisions in the not-for-profit sector of the economy. d. way financial markets set interest rates.