A bank loans Kellie's Print Shop $350,000 to remodel a building near campus to use as a new store. On their respective balance sheets, this loan is
a. an asset for the bank and a liability for Kellie's Print Shop. The loan increases the money supply.
b. an asset for the bank and a liability for Kellie's Print Shop. The loan does not increase the money supply.
c. a liability for the bank and an asset for Kellie's Print Shop. The loan increases the money supply.
d. a liability for the bank and an asset for Kellie's Print Shop. The loan does not increase the money supply.
Answer: a. an asset for the bank and a liability for Kellie's Print Shop. The loan increases the money supply.
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If the price of gasoline increases from $2.50 per gallon to $3
00 per gallon and the quantity demanded goes down from 120 million gallons per week to 115 million gallons per week, the absolute value of price elasticity of demand in that price range is approximately A) 0.23. B) 4.35. C) 0.93. D) 2.34.
An elasticity that would be considered only slightly inelastic would be
A. 0.1. B. 0.9. C. 1.0. D. 1.1.
Assume an economy is incurring unemployment. The effect of resolving this problem will be to:
A. move the level of actual output on to the economy's production possibilities curve. B. create a less equal distribution of income. C. shift its production possibilities curve to the left. D. shift its production possibilities curve to the right.
Avner is maximizing total utility by buying sports magazines and protein supplements. For him to buy more sports magazines
A) the price of protein supplements has to fall. B) the price of sports magazines has to fall. C) the price of sports magazines has to rise. D) Since Avner is maximizing his utility, nothing can change the consumption of sports magazines.