All else constant, if the use of historic costs understates the opportunity costs associated with using a particular piece of capital, economic profit will be overstated. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Assume that for a particular firm’s output price = $80, marginal cost = $30, average total cost = $25. Based on this information, the firm’s Lerner Index is equal to: A) 0.313. B) 0.375. C) 0.6. D) 0.625. ANSWER D
Date: September 10th, 2020
What rights does ownership interest give stockholders? What will be an ideal response? ANSWER Stockholders have the right to vote on issues brought before the stockholders, be the residual claimant, that is, receive a portion of any net earnings of the corporation, and the right to sell the stock.
Date: September 10th, 2020
Regarding central bank independence A) the Fed is more independent than the European Central Bank. B) the European Central Bank is more independent than the Fed. C) the trend in industrialized nations has been to reduce central bank independence. D) the Bank of England has the longest tradition of independence of any central bank in […]
Date: September 10th, 2020
Everything else held constant, a decrease in autonomous consumer spending will cause the IS curve to shift to the ________ and aggregate demand will ________. A) right; increase B) right; decrease C) left; increase D) left; decrease ANSWER D
Date: September 10th, 2020
If a bank has ________ rate-sensitive assets than liabilities, then ________ in interest rates will increase bank profits. A) more; a decline B) more; an increase C) fewer; an increase D) fewer; a surge ANSWER B
Date: September 10th, 2020
Fiscal policy is determined by the Federal Reserve System. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The Lucas critique indicates that A) advocates of discretionary policies’ criticisms of rational expectations models are well-founded. B) advocates of discretionary policies’ criticisms of rational expectations models are not well-founded. C) expectations are important in determining the outcome of a discretionary policy. D) expectations are not important in determining the outcome of a discretionary policy. […]
Date: September 10th, 2020
Which of the following are NOT traded in a capital market? A) U.S. government agency securities B) state and local government bonds C) repurchase agreements D) corporate bonds ANSWER C
Date: September 10th, 2020
Which of the following $5,000 face-value securities has the highest yield to maturity? A) a 6 percent coupon bond selling for $5,000 B) a 6 percent coupon bond selling for $5,500 C) a 10 percent coupon bond selling for $5,000 D) a 12 percent coupon bond selling for $4,500 ANSWER D
Date: September 10th, 2020
