When a firm has economic profits equal to zero
A) the firm is earning a normal rate of return on investment.
B) the firm is not earning a normal rate of return on investment.
C) the firm should shut down.
D) the firm's accounting profits are also zero.
Answer: A
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The fraction of a change in real disposable income that is spent is referred to as the
A) APC. B) MPC. C) MPS. D) APS.
The aggregate supply curve of an economy: a. is a downward-sloping straight line
b. is an upward-sloping curve. c. is a vertical line parallel to the price axis. d. is a horizontal line parallel to the output axis. e. is a ray from the origin.
Suppose that a foreign monopolist supplies the entire domestic market (there is no domestic production). The home country then applies a $10 tariff on imports from the foreign monopolist. The home country will be better off if:
a. the terms-of-trade gain is less than the deadweight loss from the tariff. b. the price change is more than the deadweight loss of the tariff. c. the deadweight loss is more than the price change from the tariff. d. the terms-of-trade gain is more than the deadweight loss from the tariff.
The discretionary fiscal policy initiatives adopted in 2009 were intended mainly to
A. decrease aggregate supply. B. increase aggregate demand. C. decrease aggregate demand. D. increase aggregate supply.