When the implicit cost of capital is positive, then the:
a. firm's accounting profit will be less than its economic profit.
b. firm's economic profit will be less than its accounting profit.
c. firm's explicit costs will be zero.
d. firm is incurring no opportunity costs
Ans: b. firm's economic profit will be less than its accounting profit.
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The banking system is able to make new loans equal to
A) total legal reserves of the system. B) total excess reserves of the system. C) total required reserves of the system. D) a multiple of total excess reserves of the system.
What is the nature of the trilemma that is encountered when choosing monetary arrangements?
A) Only two of the three aspects of internal and external balance can be accommodated simultaneously. B) Only three of the four aspects of internal and external balance can be accommodated simultaneously. C) Only one of the three aspects of internal and external balance can be accommodated simultaneously. D) Only two of the four aspects of internal and external balance can be accommodated simultaneously. E) Only one of the four aspects of internal and external balance can be accommodated simultaneously.