Entrepreneurs are important to market economies because
A) they engage in risk taking and innovation.
B) they make up a large portion of low-skilled labor.
C) they take few risks and thereby, suffer fewer bankruptcies.
D) they represent the bulk of employment at large corporations.
A
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The ________ the desired reserve ratio, the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base
A) smaller; larger; decrease B) larger; larger; decrease C) larger; smaller; decrease D) smaller; larger; increase E) larger; larger; increase
The difference between a Treasury bill and a Treasury bond is that the bill
A) can be purchased by anyone, and the bond can be purchased by U.S. citizens only. B) is insured, and the bond is not. C) pays more than the bond. D) pays no interest. E) is short-term, and the bond is long-term.
The opportunity cost of capital is
A) the rate of return realized on an investment. B) the rate of return that could be earned by the owner's capital were it used elsewhere. C) the rate used to calculate a firm's tax liability. D) the rate of interest the government uses to calculate legal business tax penalties.
Suppose the production of widgets generates negative externalities but no positive externalities. If widget producers suddenly had to pay the true marginal cost of their product for every unit they produced, including all externalities, producers would
A. have less of an incentive to control their pollution output. B. produce and sell at a lower price than before. C. produce less than the current level of output. D. produce more than the current level of output.