Suppose the total market value of all the final goods and services produced in the country of Cannedada was $4 billion in 2008 (measured in 2008 prices) and $5 billion in 2009 (measured in 2009 prices). Which of the following statements is definitely correct?
A. Average price levels increased in Cannedada between 2008 and 2009.
B. Production increased in Cannedada between 2008 and 2009.
C. Nominal GDP decreased in Cannedada between 2008 and 2009.
D. The change in real GDP cannot be determined without more information.
Answer: D
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Accounting profit is typically
A. greater than economic profit because the former does not take explicit costs into account. B. smaller than economic profit because the former does not take implicit costs into account. C. equal to economic profit because explicit costs include all opportunity costs. D. greater than economic profit because the former does not take implicit costs into account.
Which of the following are lags that fiscal policy makers must cope with?
A) effect time lags B) recognition time lags C) action time lags D) All of the above are correct.
It is reasonable to expect that if one firm in an oligopolistic market raises price, the its competitors will do the same so that all firms can earn increased revenues
Indicate whether the statement is true or false
A difference between explicit and implicit costs is that
a. explicit costs must be greater than implicit costs. b. explicit costs do not require a direct monetary outlay by the firm, whereas implicit costs do. c. implicit costs do not require a direct monetary outlay by the firm, whereas explicit costs do. d. implicit costs must be greater than explicit costs.