The economic surplus of an action is:
A. the money a person has left over after taking an action.
B. the difference between the benefit and the cost of taking an action.
C. the difference the explicit and implicit costs of taking an action.
D. the benefit gained by taking an action.
Answer: B
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Suppose the inflation rate target is "0" and the long run federal funds target is also "0." If the federal funds rate set using the Taylor rule is 1.5% and inflation rate is 3%, the output gap is ________
A) 1.5% B) 6% C) -6% D) 4.5%
Refer to Figure 29-2. Which of the events below cause the shifts in the supply and demand curves in the market for dollars against the British pound shown in the graph above?
A) Real income rises in the United States. B) Interest rates rise in England. C) Interest rates rise in the United States. D) Real income falls in England.
In the long run, if a firm's total cost exceeds its total revenue at all output levels, it should
a. always exit the industry b. always continue operating c. increase the amount of its fixed inputs d. increase the proportion of its total cost that is fixed e. maximize the difference between its marginal revenue and its marginal cost
When Jamie, a U.S. citizen, purchases a wool jacket made in Ireland, the purchase is
a. both a U.S. and Irish import. b. a U.S. import and an Irish export. c. a U.S. export and an Irish import. d. neither an export nor an import for either country.