The Problem of Blocked Earnings Is Not as Serious Now

question 26

Multiple Choice

The problem of blocked earnings is not as serious now as it once was because:

• A) fixed exchange rates have become more common now.
• B) governmental intervention in earnings is more frequent now.
• C) there is greater acceptance of free market economics now.
• D) political risk within the economy is very low in modern times.

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Definitions:

Economic Profits

The difference between the total revenue earned by a firm and the total costs of production, including opportunity costs.

Market Demand Curve

A graphical representation showing the total demand of all consumers in a market for a particular product at different prices.

Colluded

A situation where firms in a market agree to set prices or output levels to maximize collective profits, often at the expense of competition.

Marginal Cost

The financial implication of creating an extra unit of a product or service.