A firm's accounting profit is measured as
A) operating expenses minus revenue.
B) revenue minus operating expenses and taxes paid.
C) revenue plus operating expenses minus taxes paid.
D) net worth minus economic profit.
B
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An example of contractionary fiscal policy is
A) increasing government spending. B) increasing taxes. C) decreasing government spending. D) decreasing taxes. E) b and c
"An objective of firms is to maximize profits". This statement:
a) has been proven by empirical testing to be always true. b) is a normative statement and thus cannot be tested. c) is an unrealistic assumption, and therefore of little use to economists d) is an assumption used by economists to predict the behaviour of firms. e) applies only to corporations
The difference between M1 and M2 is given by which of the following?
A. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver. B. M1 is made up of currency, traveler's checks, and money in checkable accounts, whereas M2 contains M1 plus savings deposits and time deposits. C. M1 is limited to currency, whereas M2 contains M1 plus traveler's checks and money in checkable accounts. D. M1 includes currency and traveler's checks, whereas M2 contains M1 plus money in checking accounts.
The equation of exchange is an accounting identity, not an economic theory.
Answer the following statement true (T) or false (F)