All else constant, if the use of historic costs understates the opportunity costs associated with using a particular piece of capital, accounting profit will be understated
Indicate whether the statement is true or false
FALSE
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The marginal rate of technical substitution is
A) the rate at which a firm is able to institute positive technological changes to its production process. B) the rate at which a firm is able to increase its output by replacing labor with technology. C) the rate at which a firm is able to substitute one input for another, while keeping the level of output constant. D) the rate at which a firm is able to substitute one input for another, while keeping total cost constant.
Real business cycle theorists take the comovement of aggregate output and Solow residuals as strong confirmation that economic fluctuations are caused by ________
A) changes in aggregate demand B) changes in the money supply C) changes in the rate of inflation D) productivity shocks
In a competitive industry
a. firms produce a product or service with very close substitutes b. the firms products have a very elastic demand c. the firms have many rivals d. all of the above
The most important factor that influences total spending is
a. the interest rate b. real wealth c. expectations regarding future income d. the income tax rate e. real disposable income