For this question, assume that firms experience a reduction in sales. We would expect that this decrease in sales will cause
A) an increase in profit per unit of capital.
B) a decrease in profit per unit of capital.
C) no change in profit per unit of capital.
D) ambiguous effects on profit per unit of capital.
E) none of the above
B
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Consider the following statement: "Real GDP and potential GDP are always equal." Is this statement true or false? Explain your answer
What will be an ideal response?
Monetarists are of the opinion that the private economy is inherently
A. unstable and the public sector should be small in scope. B. unstable and the public sector should be large in scope. C. stable, but that the public sector should be large in scope. D. stable and that the government sector should be small in scope.
Economic Value Added helps firms to avoid the hidden-cost fallacy
a. by ignoring the opportunity costs to using a capital b. by differentiating between sunk and fixed costs c. by taking all capital costs into account including the cost of equity d. none of the above
Who is hurt and who benefits from inflation? Why?
What will be an ideal response?