If prices in the New Keynesian model were perfectly flexible, then
A) there would be a role for monetary policy.
B) the output gap would be positive.
C) the equilibrium real interest rate would be the natural rate of interest.
D) the output gap would be negative.
C
Economics
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If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then the firm will
A) incur an economic loss. B) make zero economic profit, that is, its owners make a normal profit. C) make an economic profit of $4 million. D) make an economic profit of $16 million.
Economics
Explain the law of demand. What does it imply about the shape of the demand curve?
What will be an ideal response?
Economics