Aggregate accounting enables us to measure and analyze how much a nation is producing and consuming.
Answer the following statement true (T) or false (F)
True
Aggregate accounting records total production (and thus total consumption).
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________ is the study of an economy as a whole
A) Game theory B) Microeconomics C) Behavioral economics D) Macroeconomics
Answer the following statements true (T) or false (F)
1. The supply of money is inversely related to the level of total income and output. 2. The transactions approach to the equation of exchange can be expressed as MV = PQ. 3. The velocity of money is equal to PQ/M. 4. If M equals $40, V equals 16, and Q equals 16, then P equals $40. 5. If M triples, V remains the same, and Q doubles, then P rises.
Can accounting profit be positive while economic profits are negative?
A. No. The two concepts are identical. B. No. Economic profits must always be larger than accounting profits. C. Yes, if total revenue covers opportunity costs but not explicit costs. D. Yes, if total revenue covers explicit costs but not opportunity costs.
The Springfield Bank received 1,500 inquiries following its latest advertisement describing its "establish a Certificate of Deposit (CD)-get a free CD (compact disk)" promotion in the Springfield Shopper, a local newspaper. The most recent similar ad in a similar advertising campaign was in the Brockman Business Newsletter. A local business publication generated 500 inquiries. Each ad in the Springfield Shopper costs $500. Each ad in the Brockman Business Newsletter costs $125. Inquiries from both publications have the same success rate in turning inquiries into sales.(a) Assuming that additional ads will generate similar response rates, is Springfield Bank running an optimal mix of ads in the Springfield Shopper and the Brockman Business Newsletter? Why or why not?(b) If you
claim that the Springfield Bank is currently running an optimal mix of ads, clearly explain why they are using an optimal mix of ads. If you claim that the Springfield Bank is currently not running an optimal mix of ads, clearly explain how the Springfield Bank can better manage the ads. What will be an ideal response?