Below the short-run shutdown price, the firm
A) is earning positive economic profits.
B) is earning negative economic profits.
C) is making a normal rate of return on its capital investment.
D) may be earning a positive or negative economic profits depending upon costs.
B
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When lenders are unable to get good information about the worthiness of a project the lender has the problem of
A) adverse selection. B) moral selection. C) moral hazard. D) adverse hazard.
If the exchange rate changes from 1.5 euros per dollar to 1.0 euro per dollar, the euro has
A) depreciated against the dollar. B) appreciated against the dollar. C) fallen inversely in value. D) depreciated against the euro. E) appreciated against the euro.
Which of the following is not a rationale for development planning?
(a) capital market failures. (b) rent seeking behavior. (c) attitudinal or psychological impact. (d) all are rationales for development planning in developing countries.
In the Keynesian analysis, government spending
a. refers to spending by federal, state, and local governments. b. is much less important than consumption or planned investment. c. is usually the most unstable component of aggregate expenditure. d. None of these.