In the long run, perfectly competitive firms earn zero economic profit; this means that each firm is
a. always trying to move into a more profitable market.
b. content to stay in its market.
c. always facing new entrants to its market.
d. earning negative accounting profit.
B
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Dividing fiscal policy into two instruments has the effect of introducing another policy target:
A) the interest rate. B) the national debt. C) the unemployment rate. D) the division of output between public and private spending.
The analysis of the three major macroeconomic markets shows:
a. That GDP is a constant figure which is not influenced by any movements in the three markets. b. That the three markets are uncorrelated and movements in one market are independent from movements in the other two markets. c. That movements in one market cause predictable changes in the other two markets. d. A) and B) are both correct.