A shortage creates a situation that forces prices to ________ while a surplus creates a situation that forces prices to ________
A) decrease; increase
B) decrease; decrease
C) increase; decrease
D) increase; increase
Answer: C
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Accountants define profit as "total revenue minus total cost,"
A) and so do economists. B) but economists define profit as net revenue minus total cost. C) but economists define profit as net cost minus total revenue. D) but economists define profit as total cost minus total revenue. E) but economists have long abandoned the concept of profit.
Monetarism is a school of thought put forth by Milton Friedman. He argued that the economy would most likely
A) be below potential GDP. B) be above potential GDP. C) be unstable. D) be at potential GDP.
Replacing the simple Keynesian consumption function with the function based on the permanent-income hypothesis results in a ________ short-run multiplier, implying a ________ stable private economy
A) higher, more B) higher, less C) lower, more D) lower, less
The slope of the budget line that expresses the tradeoff between risk and return for an asset can be represented by
A) (Rf - Rm)/?m. B) (Rm - Rf)/?m. C) Rm - Rf. D) b.