In which of the following economic activities do we commonly find a proprietor acting as a supervisor, a provider of capital, and a residual claimant?
a. A multinational bank
b. An oil exploration company
c. A small medical store
d. An aircraft manufacturer
C
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Suppose your expenses for this term are as follows: tuition: $28,000, room and board: $9,000, books and other educational supplies: $2,500
Further, during the term, you can only work part-time and earn $16,000 instead of your full-time salary of $42,000. What is the opportunity cost of going to college this term, assuming that your room and board expenses would be the same even if you did not go to college? A) $36,500 B) $56,500 C) $65,500 D) $72,500
Falling transportation costs in the 19th century
a. fostered regional specialization according to comparative advantage. b. created increasing lags for price declines along the Mississippi. c. propelled the process of western expansion. d. All of the above. e. Both a and c are correct.
Many economists believe that stabilization policy should be limited in scope until
a. Keynesians and monetarists agree on policy. b. inflation is brought under control. c. the economy is operating near capacity. d. forecasting becomes more reliable.
Which of the following is an important implication of the rational expectations argument?
A) Since people form their expectations using all available information, the use of monetary policies to eliminate output gaps will lead to inflation. B) Since any consistent set of monetary policies will be learned and anticipated by a population with rational expectations, policies designed to influence the economy to a level of production other than the potential real GDP will be ineffective. C) Although people may revise their expectations about the price level and future economic activity, they cannot act on these changes because in reality, wages and prices are sticky. Thus, policy intervention is necessary. D) Policymakers must constantly monitor economic activity and revise their economic policy goals to keep up with changing expectations of a population with rational expectations.