In the short run a firm should shut down if it cannot
A) make normal profits.
B) make economic profits.
C) cover its variable costs.
D) cover its fixed costs.
C
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An open market sale of securities by the Fed
A) decreases banks' reserves and increases banks' securities. B) increases banks' reserves and decreases banks' securities. C) increases banks' total assets. D) involves a bank selling government securities to the Fed.
Economists who are concerned with the effect of fiscal policy on the ability of households and firms to borrow to finance consumption will focus on ________, and economists who want to know whether the government's fiscal policy is sustainable will
focus on ________. A) yearly budget deficits; the federal debt B) the federal debt; yearly budget deficits C) yearly budget deficits; both the federal debt and yearly budget deficits D) the federal debt; both the federal debt and yearly budget deficits
An advantage of monetary policy over fiscal policy is the:
A. decisions are made by politicians, not experts in finance, banking, and monetary policy. B. decision makers are under political pressures. C. decision makers cannot change and enact policy quickly. D. decisions are made by experts who are independent of political pressures.
The 2004-2013 rapid growth in global foreign exchange trading can be explained by
A. large increases in trading by hedge funds, pension funds, and other financial institutions. B. volatility in U.S. long-term government bond yields. C. an increase in the number of nations adopting the floating exchange rate system. D. increases in the volume of global trade in the recent years.