In a barter economy that had no form of currency, how could interest exist?
Goods would be loaned, and when the loan was repaid, it would be in a greater quantity of the goods or repaid with goods of greater value than those originally loaned. For example, if Sue borrowed five bottles of wine from Sally, the terms of the loan might dictate that Sue return six bottles.
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Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of
strawberries. A) raises; increases B) lowers; probably changes, but more information is needed to determine if it increases or decreases C) lowers; increases D) probably changes, but more information is needed to determine if it rises or falls; increases E) raises; probably changes, but more information is needed to determine if it increases or decreases
Employment protection laws make it harder for employees to lose their jobs and as a result, these laws reduce structural unemployment
Indicate whether the statement is true or false
A textbook publisher is in monopolistic competition. If the firm spends nothing on advertising, it can sell no books at $100 a book, but for each $10 cut in price, the quantity of books it can sell increases by 20 books a day
The firm's total fixed cost is $2,400 a day. Its average variable cost and marginal cost is a constant $20 per book. If the firm spends $1,200 a day on advertising, it can increase the quantity of books sold at each price by 50 percent. Compared to the situation if it does not advertise, if the firm advertises, its economic profit A) increases by $400. B) decreases by $400. C) doubles. D) is the same as with no advertising.
Will it take a smaller amount of government spending to increase the level of national income if the government balances its budget or if it runs a budget deficit? Explain