Assume that a firm's interest-rate cost-of-funds curve for R&D is perfectly elastic. Which of the following would increase a firm's optimal R&D expenditures and, in equilibrium, reduce the expected rate of return on the last dollar of R&D?
A. A rightward shift of the expected-rate-of-return curve.
B. An upward shift of the interest-rate cost-of-funds curve.
C. A leftward shift of the expected-rate-of-return curve.
D. A downward shift of the interest-rate cost-of-funds curve.
Answer: D
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Which of the following occurs when a market is in equilibrium?
A) quantity supplied is equal to quantity demanded B) supply is equal to demand. C) the price of the good will tend to rise, all else held constant. D) the price of the good will tend to fall, all else held constant.
Which of the following shocks is most likely to cause an expansion?
a. Defense spending falls b. Defense spending rises c. Defense spending rises and then falls d. Oil prices surge upward e. Oil prices rise slowly
The average income in a rich country
a. is about 5 times that in a poor country. Further, people in rich countries have longer life expectancy. b. is about 5 times that in a poor country. However, people in rich countries have about the same life expectancy as those in poor countries. c. is more than ten times that in a poor country. Further, people in rich countries have longer life expectancy. d. is more than ten times that in poor country. However, people in rich countries have about the same life expectancy as those in poor countries.
Under a gold standard, if the market price of gold is below the official price of gold (set by the monetary authority), people will be more likely to sell gold __________________, which will cause the money supply to _______________ and the price level.to _______________
A) to the monetary authority; fall; fall B) to the monetary authority; rise; rise C) in the gold market; fall; fall D) in the gold market; rise; rise