If the money supply in the economy were at MS2, and the Federal Reserve Bank used open market operations to move money supply to MS1 the overall result in the economy would be:
A. Aggregate demand shifted in, causing GDP to fall.
B. LRAS move to the FE level of output.
C. Aggregate demand shifted out, causing GDP to rise
D. Aggregate supply shifted in, causing GDP to fall.
Answer: A
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The use of psychological incentives to solve commitment problems would be least effective in games played:
A. once between family members. B. repeatedly between strangers. C. once between strangers. D. repeatedly between family members.
Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is $20, how much economic profit does the firm make?
A) $0 B) $12 C) -$20 D) -$10
A perfectly competitive firm is a "price taker" because it cannot sell its product for more than the market price
a. True b. False Indicate whether the statement is true or false
In comparing accounting profit with economic profit, we generally find that
A. accounting profit is less than economic profit. B. economic profit exceeds accounting profit by the amount of opportunity costs. C. economic profit and accounting profit are the same in the short run. D. accounting profit is greater than economic profit.