-In the Above Figure, If the Economy Is Initially at Point

question 214

Multiple Choice

-In the above figure, if the economy is initially at point D and government expenditure increases, the economy will move to point

• A) move to point C.
• B) stay at point D.
• C) move to point B.
• D) move to point A.

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Definitions:

Economic Profit

The profit a firm makes after subtracting both its explicit (out-of-pocket) and implicit (opportunity) costs.

Total Costs

The aggregate amount of all expenses associated with the production of a good or service, including both fixed and variable costs.

Implicit Costs

These are the costs of using resources owned by the company for production that aren't directly paid for or incurred as a clear expense.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.