Normal rate of return is

A) accounting profit.
B) an explicit cost.
C) economic profit.
D) the amount that must be paid to obtain investment in a business.


Answer: D

Economics

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Suppose that the production function for the economy is Y = AK0.5L0.5. If the capital stock = 40,000, the quantity of labor = 10,000, and the efficiency index = 3, the equilibrium real rental price of capital is

A) $0.33. B) $0.75. C) $1.00. D) $2.22.

Economics

A typical consumer spends 30% of income on housing and housing is a necessity for consumers (the income elasticity for housing is 0 < ?H < 1 ). What are the maximum and minimum values for the income elasticity of all other goods, ?O?

What will be an ideal response?

Economics

An increase in consumers' incomes will have what effect on the equilibrium in the restaurant meals market?

a. Price will increase, and quantity will increase. b. Price will decrease, and quantity will increase. c. Price will increase, and quantity will decrease. d. Price will decrease, and quantity will decrease. e. Price will increase, and quantity will stay the same.

Economics

If a positive inflation shock occurs and monetary policymakers do not change the inflation target:

A. output will eventually rise above potential output while inflation will equal the inflation target. B. output will eventually return to potential output but inflation will exceed the inflation target. C. output will eventually fall below potential output while inflation will equal the inflation target. D. output will eventually return to potential output and inflation will equal the inflation target.

Economics