The economy's current rate of interest is 10 percent and a firm has $10,000 of owner-invested capital. Its total revenue is $5000 and the firm's explicit costs are $3500. From this we know that this firm's
A) accounting profit is $500.
B) economic profit is $1,500.
C) accounting profit is $1,500.
D) economic profit is $5,000.
Answer: C
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Someone was just laid off from a job. Given what you know about the unequal distribution of civilian unemployment, to which of the following groups does this person most likely belong?
A. white male with a bachelor's degree B. African American female with a bachelor's degree C. Hispanic female with a high school diploma D. African American male teenager with less than a high school diploma
A special-interest issue is one whose passage yields:
A. private benefits equal to external benefits. B. large external benefits compared to private benefits. C. small economic losses to a small number of people and large economic losses to a large number of people. D. large economic gains to a small number of people and small economic losses to a large number of people.
Answer the following statements true (T) or false (F)
1) The business cycle is primarily concerned with changes in the level of overall prices over time. 2) A sometimes short, sometimes extended period of declining output and living standards is referred to as a recession. 3) The business cycle reflects both short-run fluctuations in output and long-run economic growth. 4) Economists and policymakers are generally more concerned about nominal GDP than real GDP. 5) Nominal GDP measures a nation's output in current year prices.
If an economy wants to experience economic growth, what decision must it make and carry out? Explain.
What will be an ideal response?