An example of physical capital is:
A. a construction worker's strength.
B. a scientist's knowledge of cellular biology.
C. Both of these are examples of physical capital.
D. Neither of these is an example of physical capital.
Answer: D
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Foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market are called:
A. fixed-exchange-rate deposits. B. purchasing-power-parity funds. C. international reserves. D. balance-of-payment currency.
________ occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business
A) Deliberate dumping B) Ravaging dumping C) Voracious dumping D) Predatory dumping
Which of the following is an example of an inferior good?
a. A 15 percent increase in income results in a 17 percent decrease in demand for subcompact cars. b. A 10 percent increase in income results in a 14 percent increase in demand for sports cars. c. A 12 percent increase in income results in a 12 percent increase in demand for sedan cars. d. A 20 percent decrease in income results in a 30 percent decrease in demand for luxury cars.
The ABC Corporation earned a real rate return of 4.5 percent on an investment. In the economy, the nominal rate of interest was 6 percent and the rate of inflation was 3 percent. We can conclude that
A) the investment was unprofitable. B) the investment was profitable. C) the real rate of interest was 9 percent. D) the real rate of interest was 1.5 percent.