The Exit of Existing Firms from a Competitive Market Will

question 373

Multiple Choice

The exit of existing firms from a competitive market will

• A)increase market supply and increase market price.
• B)increase market supply and decrease market price.
• C)decrease market supply and increase market price.
• D)decrease market supply and decrease market price.

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Definitions:

Expansionary Monetary Policy

A policy by central banks to increase the money supply and decrease interest rates to stimulate economic growth.

Keynesian Economist

An economist who believes in Keynesian economics, which advocates for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of depression.

Savings

Money that is put aside for future use rather than spent immediately, often in accounts that yield interest.

Interest Rates

The percentage of a loan charged as a cost of borrowing or paid as a part of return on savings, typically expressed as an annual percentage of the principal.