The larger the fraction of an investment financed by borrowing, the greater the potential for both profits and losses from that investment
a. True
b. False
Indicate whether the statement is true or false
True
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When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect
Indicate whether the statement is true or false
For an inferior good, if the income effect more than offsets the substitution effect, we call that good
A) a Giffen good. B) a normal good. C) an inferior good. D) a neutral good.
The Federal Open Market Committee (FOMC):
A. Provides advice on banking stability to the Fed B. Monitors regulatory banking laws for member banks C. Sets policy on the sale and purchase of government bonds by the Fed D. Follows the actions and operations of financial markets to keep them open and competitive
If an increase in income results in a decrease in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive B. a normal good, negative C. an inferior good; positive D. an inferior good; negative