The principal of a loan is the:
A. set of rules and conditions borrowers agree to when taking out a loan.
B. original amount of the loan.
C. set of rules and conditions savers agree to when agreeing to let someone borrow their money.
D. original amount that people want to borrow.
Answer: B
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The manager of View Your World, a high-end window manufacturer, notices that the cost to distribute their windows in the spot market has risen. As a result of the change, which of the following is true?
A) The manager has more of an incentive to integrate forward. B) The manager has more of an incentive to integrate backward. C) The manager has less of an incentive to integrate backward. D) The manager has less of an incentive to integrate forward
The imposition of both tariffs and nontariff barriers leads to: a. an increase in total surplus
b. increased domestic consumption. c. increases in the prices of imported goods. d. increased foreign production.
A corrective tax is also known as:
a. a command-and-control regulation. b. a Coase tax. c. a Pigovian tax. d. a Smithian tax.
In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that
A) existing capital equipment can be used more intensively. B) the unemployment rate usually rises dramatically along with the price level. C) workers can be switched from counted to uncounted production. D) wage rates rise almost simultaneously with the price level.