Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of:
A. $500,000 and an economic profit of $200,000
B. $400,000 and an economic profit of $200,000
C. $300,000 and an economic profit of $400,000
D. $200,000 and an economic profit of $500,000
A. $500,000 and an economic profit of $200,000
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If the Fed can ________ inflation expectations, it might achieve ________ inflation without ________ the unemployment rate
A) lower; lower; lowering B) raise; lower; raising C) lower; lower; raising D) raise; higher; lowering E) lower; higher; lowering
Many economists argue that, in the long run, the economy self-corrects and achieves full employment. This argument is known as the:
a. natural rate hypothesis. b. incomes policy approach. c. political business cycle theory. d. Keynesian cross model.
If there is a recession, the Fed would most likely encourage banks to provide loans by:
a. buying government securities. b. raising the discount rate. c. selling government securities. d. raising the federal funds rate.
One of the clear effects of deregulation was
a. lower prices of many services. b. increased entry of new firms into regulated industries. c. lower income to unions working in regulated industries. d. all of the above.