When the rate of interest (or price of capital) decreases, the
a. quantity demanded of loanable funds by the firm will decrease
b. quantity demanded of loanable funds by the firm will increase
c. firm's MRP of capital increases
d. firm's MPP of capital increases
e. firm's MRP of capital decreases
B
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The country of Kemper is on its aggregate production function at point W in the above figure. If the population increases with no change in capital or technology, the economy will
A) move to point such as Y. B) remain at point W. C) move to point such as X. D) move to point such as Z.
Prudential regulation ________
A) requires that banks maintain the confidentiality of loan applications B) is administered by a specific insurance company C) is necessitated by the government's safety net for the banking system D) is an effective substitute for prudential supervision
When an entrepreneur invests his own financial capital in order to start a business
A) the opportunity cost of capital should be included in the economic cost of doing business. B) the investment is treated as a fixed cost, so it should not be considered as a cost of doing business. C) the firm's economic profits will exceed its accounting profits. D) the accounting costs increase because the funds would otherwise have to be borrowed.
A good whose demand is directly related to income is a(n)
A. normal good. B. new good. C. inferior good. D. regular good.