Economists recognize what is sometimes referred to as "psychic income" such as the value some people attach to being their own boss
As such, failure to factor in psychic income when calculating economic profit could result in an understatement of the actual economic profit received from a particular enterprise. Indicate whether the statement is true or false
TRUE
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Which of the following is an effect of an increase in the price level in an economy?
a. The real value of dollar-denominated assets will fall b. The aggregate expenditure line will shift upward. c. The equilibrium real gross domestic product will increase. d. There will be a downward movement along the aggregate demand curve of the economy. e. The aggregate demand curve of the economy will shift rightward.
Which of the following statements most likely lies within the realm of macroeconomics? a. An increase in the price of automobiles will lead to a decrease in the quantity of automobiles demanded
b. Due to process innovations in computer chip manufacturing, the market supply of computers increased. c. Due to an economic recession, manufacturing firms began implementing layoffs of their workforces. d. Anticipating that the benefits would outweigh costs involved, an undergraduate student purchases the course textbook.
Suppose that the economy has a structural deficit of $200 billion but is running a budget surplus. It follows that:
A. there is a cyclical deficit. B. there is no cyclical deficit or surplus. C. there is a cyclical surplus. D. the cyclical deficit cannot be determined without more information.
Cummins, Hubbard, and Hassett studied the effects of taxes on investment by
A. examining what happened to investment when major tax reforms took place. B. raising tax rates on certain businesses and testing their reaction. C. raising tax rates on equipment and reducing tax rates on structures. D. seeing if investment spending is correlated with taxes on investment.