Why might a firm remain in operation even if it is earning zero economic profit?
What will be an ideal response?
If a firm is earning zero economic profit, it is earning a normal rate of return. Thus, the opportunity costs of all factors of production have been covered.
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The aggregate price level is likely to rise if ________
A) the long-run real interest rate rises B) the long-run nominal interest rate rises C) the stock of money grows faster than real GDP D) real GDP grows faster than the stock of money
Import tariffs in the United States are likely to reduce U.S. exports, both because of the resulting decrease in foreign earnings of dollars from exports to the United States and because of the likelihood of increases in other countries' import restrictions against U.S. goods
a. True b. False Indicate whether the statement is true or false
Unemployment insurance reduces the incentive for the unemployed to find and take new jobs
a. True b. False Indicate whether the statement is true or false
If purchases power parity exists and the exchange rate is 1.50 u.s. dollars per British pound, then a latte that has a price of $4.00 in Northridge, California, has a price of _ in London, England?
a. 8.00 pounds b. 4.00 pounds c. 6.00 pounds d. 2.67 pounds e. .38 pounds