Nonprofit, or not-for-profit, firms
a. maximize revenue instead of profit
b. minimize cost rather than maximize profit
c. often pursue goals other than profit maximization
d. pursue profit as their main goal despite their name
e. have no incentive to produce efficiently
C
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Refer to Figure 24-1. Ceteris paribus, an increase in personal income taxes would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Compared to an economy that uses a medium of exchange, in a barter economy
A) transaction costs are higher. B) transaction costs are lower. C) liquidity costs are higher. D) liquidity costs are lower.
The income-expenditure identity is best paraphrased as
A) all spending generates income. B) all profits are used for investment spending. C) on average, consumers cannot save. D) on average, government can spend no more than what it collects in income taxes.