A period when the economy shrinks is known as
A. a slump.
B. a recession.
C. a contraction.
D. all of the above.
Answer: D
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In the figure above, the richest 40 percent of households receive ________ of total income
A) 70 percent B) 30 percent C) 60 percent D) 80 percent
Acme Home Builders, Inc, has built 24 houses so far this year at a total cost to the company of $4.80 million. If the company builds a 25th house, its total cost will increase to $5.05 million. Which of the following statements is correct?
a. For the first 24 houses, the average cost per house was $205,000. b. The marginal cost of the 25th house, if it is built, will equal $250,000. c. If the company can sell the 25th house for at least $202,000 . then it should build it. d. All of the above are correct.
Which of these is an example of economies of scale?
(A) A restaurant charges customers $1 a glass for water that was once provided for free. (B) A ranch increases its profits by expanding from 400 to 800 cattle without buying or renting additional land. (C) An Internet access company charges customers different rates for using the Internet at different times of day. (D) A shoe store finds it can increase profits by hiring high school students who are willing to work for minimum wage.
One problem that investors in foreign countries face is the possibility of a decline in the value of that foreign country's currency. Which of the following would be an effective way to offset this problem?
A. Hedge through currency swaps. B. Convert as many of your dollars into their dollars as possible. C. Be ready to pull out at the first sign of trouble. D. Finance your investment outside of that country.