When stock prices fall A) an individual’s wealth is not affected nor is their willingness to spend. B) a business firm will be more likely to sell stock to finance investment spending. C) an individual’s wealth may decrease but their willingness to spend is not affected. D) an individual’s wealth may decrease and their willingness […]
The stock market is A) where interest rates are determined. B) the most widely followed financial market in the United States. C) where foreign exchange rates are determined. D) the market where most borrowers get their funds. ANSWER B
Lending abroad represents: A) a capital outflow. B) a capital inflow. C) positive net savings. D) none of the above. ANSWER A
An isoquant identifies all of the combinations of two inputs that result in the same total costs of production. Indicate whether the statement is true or false ANSWER FALSE
Illustrate graphically the effect the credit market crisis in the United States in 2008 had in the market for existing single-family homes. Assuming the demand for existing single-family homes is relatively inelastic, what is likely to happen to the total revenues of home sellers as a result of the credit market crisis? ANSWER The […]
Assume that, over time, engineers develop new residential furnaces that can run on different types of fuels, e.g., natural gas, electricity, propane, and fuel oil, simply by flipping a switch on the furnace. How would this technological change affect the price elasticity of demand for natural gas? Why? ANSWER The price elasticity of demand […]
As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs. Indicate whether the statement is true or false ANSWER FALSE
A record of all transactions between residents of the reporting country and residents of the rest of the world over a period of time is called the: A) national income product accounts. B) balance of payments accounting system. C) accrual accounting system. D) none of the above. ANSWER B
Assume that, for a particular demand curve, when price rises from $50 to $60, total revenue falls from $8,750 to $7800. a. Based on this information, what is the quantity demanded at each price. b. Without calculating the coefficient of elasticity, is demand over this range elastic or inelastic? How do you know? ANSWER […]
Consumer confidence is measured by two indices: the Consumer Sentiment Index and the Consumer Confidence Index. Indicate whether the statement is true or false ANSWER TRUE
