In the long run, firms in a monopolistically competitive market operate at:
A. an efficient scale.
B. a less-than-efficient scale.
C. a more-than-efficient scale.
D. Any of these could be true, depending on the individual firm.
B. a less-than-efficient scale.
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According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent,
government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough.
Refer to the information. The equilibrium level of GDP in this economy is:
Answer the question on the basis of the following information for a private closed economy where C is consumption, Y is the gross domestic product, I g is gross investment, and i is the interest rate:
A. $240.
B. $300.
C. $360.
D. $400.