Suppose a firm's total revenue is $1,000,000. The firm has incurred explicit costs of $750,000
There is also $50,000 of forgone wages by the owner, $10,000 of forgone interest by the owner, $3,000 worth of economic depreciation, and $20,000 worth of normal profit. What is the firm's economic profit? A) $250,000
B) $200,000
C) $190,000
D) $167,000
E) $180,000
D
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A decision by foreign central banks to sell their holdings of U.S. Treasury bonds will
A) lower bond prices and interest rates in the United States. B) increase bond prices and lower interest rates in the United States. C) lower bond prices and increase interest rates in the United States. D) increase bond prices and interest rates in the United States.
Which of the following statements is (are) correct? There is agreement between the Keynesians and monetarists that
a. an increase in aggregate demand will increase both output and price in the short run. b. there is a trade-off between inflation and unemployment in the short run. c. in the long run, when the expected price level also has time to adjust, output will not be affected by changes in aggregate demand. d. All of the above e. None of the above