A firm's "normal profit" is best characterized by the
A) average of a firm's profits over the past five years.
B) amount of profit necessary to keep the price of a firm's stock from changing.
C) amount of profit a firm could earn in its next best alternative activity.
D) the average amount of profit earned in the firm's industry.
C
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Balance of payments issues are related to the relative value of different countries' currencies and the flow of goods, services, and financial assets among countries. The rate at which one country's currency can be traded for another is called:
A) the trade balance. B) capital inflows. C) capital outflows. D) the exchange rate.
Refer to Figure 14.1. Other things equal, an increase in government spending on infrastructure projects is best represented as a movement from
A) point X to point Y. B) point Z to point X. C) point Z to point Y. D) point Y to point X.