Positive profit attracts entry, and negative profit leads to exit. The ability of an asset to move from lower- to higher-valued uses is the force that moves an industry toward long-run equilibrium. Such asset mobility leads to:
a) Competitive disadvantage
b) The Indifference Principle
c) The Waving Hand Equilibrium
d) Below-normal returns.
Answer: B
Economics
- If the Federal Reserve creates new money to finance the government's deficit, then it is monetizing the deficit.(True/False)
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- When the Federal Reserve lowers the reserve requirement, the amount of money in circulation should tend to decrease.(True/False)
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