A tax on accounting profits in an industry
A. will lead to more inefficiency if economic profits are high.
B. will lead to more inefficiency if economic profits are low
C. will increase the MRP curve of nonfixed factors.
D. will increase the MRP curve of fixed factors.
Answer: B
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In the long run, firms in a perfectly competitive market will:
A. exit if the price is lower than their lowest average total cost. B. attract other firms to the market if the price is equal to their lowest average total cost. C. not attract other firms if they are earning slightly positive economic profits. D. earn positive economic profits.
Suppose that Bill, a resident of the U.S., buys software from a company in Japan. Explain why and in what directions this changes U.S. net exports and U.S. net capital outflow
What would be the amount of deposits D, given that the monetary base MB = $750 billion, the required reserve rate (rD) = 0.1, the excess reserve rate (ER/D) = 0.005, and non-bank currency to deposits (C/D) equaled 1.2?
What will be an ideal response?
If the public correctly perceives that the central bank will reduce inflation, then
a. the short-run Phillips curve shifts right, and unemployment will rise by more than otherwise. b. the short-run Phillips curve shifts right, and unemployment will rise by less than otherwise. c. the short-run Phillips curve shifts left, and unemployment will rise by more than otherwise. d. the short-run Phillips curve shifts left, and unemployment will rise by less than otherwise.