Economic profits differ from accounting profits because ________. ...

[fox]

Economic profits differ from accounting profits because ________.
 
  A) the former is calculated by economists and the latter by accountants
  B) many firms own their own capital so accounting profits do not factor this cost
  C) most firms report economic profits once a year and accounting profits every pay period
  D) all of the above
  E) none of the above

Question 2

Suppose the required reserve ratio is 10, excess-to-deposit ratio is 10, and the currency-to-deposit ratio is 20. If the Fed buys 50 million worth of securities, what will happen to the money supply?
 
  What will be an ideal response?

[Sophiapenny]

Answer to Question 1

B

Answer to Question 2

The money multiplier is (1 + 0.2 )/(0.2 + 0.1 + 0.1 ) = 3. The money supply will increase by 3  50 million = 150 million.

[fox]

Thank you

[Sophiapenny]

No problemo