When a firm is operating at peak efficiency it is at the
A. shutdown point.
B. break-even point.
C. between the shutdown and break-even points.
B. break-even point.
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The natural rate of unemployment is higher in Europe than in the U.S. due to ________
A) the greater relative strength of American unions B) the greater relative generosity of U.S. unemployment benefits C) the greater severity of the business cycle in Europe relative to the U.S. D) stricter European work rules
All of the following are problems caused by deflation except
A. Borrowers face an increased burden of debt B. The real interest rate becomes higher than the nominal interest rate C. Firms make higher profits as consumers buy more goods and services D. Consumers postpone purchases in the hope of lower prices in the future
Analysis of adverse selection indicates that financial intermediaries, especially banks
A) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance. B) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations. C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds. D) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.
We might predict that Japan has a comparative advantage compared to Russia in the production of hi-tech electronics because Japan has:
A. a climate is more suitable for electronics. B. more land available to build manufacturing plants on. C. more advanced electronics technology. D. more unskilled labor available for production.