A Collapse in the National Banking System of Lasia Has

question 170

Multiple Choice

A collapse in the national banking system of Lasia has resulted in a condition where prices are declining.This condition is known as:

• A)disinflation.
• B)deflation.
• C)contra inflation.
• D)overproduction.

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Definitions:

Economic Profit

The total revenue of a business minus both explicit and implicit costs.

Long-run Equilibrium

A state in which all firms in a market are making normal profits, with no incentive for entry or exit, indicating a stable market condition.

Competitive Price-searcher Market

A market condition where firms have some power to set prices due to product differentiation, yet must actively seek out the best prices and competition exists.

Zero Economic Profits

A situation in which a firm's total revenues exactly equal its total costs, implying no excess return over the opportunity cost of resources.