Which of the following statements about potential GDP is false?
A) The Fed's goal is to have equilibrium GDP close to potential GDP.
B) When GDP is at potential, cyclical unemployment is zero.
C) It occurs when firms are producing at their maximum level of output.
D) It occurs when firms are producing with a workforce of normal size working normal hours.
C
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Haiti was once heavily forested. Today, 80 percent of Haiti's forests have been cut down, primarily to be burned to create charcoal. The reduction in the number of trees has led to devastating floods when it rains heavily. This is an example of
A) the tragedy of the commons. B) tragic externalities. C) human greed. D) the consequences of too many people having private property rights.
A firm has $300 million in revenues and explicit costs of $100 million. If its owners have invested $150 million in the company at an opportunity cost of 10 percent a year, the firm's accounting profit is: a. $50 million
b. $150 million. c. $185 million. d. $200 million.