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25 Cards in this Set
- Front
- Back
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Economic profit =
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revenue - explicit cost - implicit cost
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Short-Run Aggregate Supply Curve is ____________
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UPWARD SLOPING
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Long-Run Aggregate Supply Curve is ____________
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VERTICAL
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During a recession there is _______________ demand.
An Expansionary policy would ___________ gov. spending or ___________ taxes., both of which would ___________ the level of aggregate demand. An expansionary monetary policy would attempt to ____________ interest rates. |
insufficient aggregate
increase cut taxes increase demand decrease |
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In a MONOPOLISTICALLY competitive industry, firms only earn _________ profits in the long-run. When there is an equilibrium, a firm will operate INEFFICIENTLY with Price _____________ than MR
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NORMAL
GREATER P>MR |
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As FULL EMPLOYMENT approaches, demand for goods and services is rising. This increased Demand usually causes and ___________ in Price level . The result is __________
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INCREASE
INFLATION |
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Price freezing would cause ___________
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DEMAND TO EXCEED SUPPLY
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Reserve ratio =
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RESERVES / TOTAL DEMAND DEPOSITS
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____________ is the appropriate index for measuring the changes in a COMPANY'S PURCHASING POWER
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PPI or WHOLESALE INDEX
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The mopoly can increase profits by increasing output and decreasing price as long as ___________. The firm will maximize profits by continuing to the point at the given output ___________
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MR>MC
MR=MC |
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Firms in a monopolistically competitive industry produce _________products, engage in _________ competition, and face a ____________ demand curve, there are__________ to enter the market.
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differentiated
non-price downward sloping NO barriers |
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Firms in a porfectly competitive industry porduce a __________ product, engage in _________ competition, and face a ___________ demand curve, there are__________ to enter the market.
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standardized
price perfectly elastic NO barriers |
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Induced investment is the investment made in an economy in response to ______________
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CHANGES IN THE LEVEL OF NATIONAL INCOME
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If inflation in Russia is 10% and in US is 5% , the Russian Ruble will___________
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depreciate by 5% and
US $ appreciate by 5% |
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BALANCE OF PAYMENT:
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Exports
- imports Exports of services - imports of services + net investment income + net transfers = CURRENT ACCOUNT BALANCE + Net change in foreign holdings of domestic assets - Net change in domestic holdings of foreign assets = CAPITAL ACCOUNT BALANCE |
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If someone purchases a CALL option, he expects prices to ____________
If someone purchases a PUT option, he expects prices to ____________ |
RISE
DECREASE |
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___________ are the reduction in average total cost of production when a firm expands plant production.
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ECONOMIES OF SCALE
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Normal profit is
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a cost of resources from an economic perspective
it is a point where, Revenue = Implicit + Explicit costs Economic profit< accounting profit |
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Net realizable value =
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Sale value - separable costs
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Economic cost is
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the sum of all explicit and implicit costs of the business firm
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Imputed costs are ________ costs; they are not known and must be ________.
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implied
estimated |
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A normal profit is
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a cost of resources from an economic perspective.
the amount necessary for the firm to be willing to keep the resources deployed in the firm. |
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The US balance of trade is decreased by
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US imports.
A favorable balance of trade occurs when exports exceed imports. |
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Natural rate of unemployment - is the rate that
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occurs when there is no cyclical unemployment and the economy is producing its potential output
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Economic profit =
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Total Revenue - Total costs
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