Which of the Following Is True

question 264

Multiple Choice

Which of the following is true?

• A) Profit as calculated by accountants and economic profit are not necessarily equal.
• B) Profit as calculated by accountants is always smaller than economic profit.
• C) Economic profit ignores implicit costs.
• D) The Internal Revenue Service taxes the firm's economic profit but not its normal profit.
• E) The Internal Revenue Service taxes the firm's normal profit but not its economic profit.

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Definitions:

Liberal Economist

An economist advocating for policies promoting free market principles, minimal government intervention, and individual liberties in economic matters.

Government Spending Cuts

Government Spending Cuts involve the reduction of public sector expenditure in an attempt to balance budgets and reduce deficits.

Multiplier

In economics, it refers to the factor by which gains in total output are greater than the change in spending that caused it.

GDP

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.