Specialization is the concept of devoting resources to the production of only a small number of goods and services
a. True
b. False
Indicate whether the statement is true or false
True
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If the interest rate increases, the
a. cost of saving will increase b. cost of borrowing will increase c. firm should decrease the amount of capital it owns by selling capital d. firm should acquire more capital e. supply of loanable funds will increase
The marginal propensity to save is
a. the change in saving divided by the change in income. b. the change in income divided by the change in saving. c. saving divided by income. d. income divided by saving. e. saving divided by consumption.
As suppliers and potential suppliers of exhaustible resources continually calculate whether to extract now or in future, and how much to extract, an equilibrium arises when:
a. the cost of extracting such resources is equal to its price. b. the rate of return for such resources equals the rate of interest on alternative uses of the funds. c. the cost of extracting such resources is equal to the price of the commodity using these resources. d. the price of such resources is equal to the rate of interest of bank accounts and other interest-bearing investments. e. the rate of return on alternative investments is equal to the cost of extracting such resources.
If the Congress passes legislation to cut taxes to counter the effects of a severe recession, then this would be an example of a(n):
A. nondiscretionary fiscal policy. B. political business cycle. C. contractionary fiscal policy. D. expansionary fiscal policy.