One major fault with factor pricing analysis is that marginal productivity theory merely attempts to justify the income distribution that the capitalist system yields.
Answer the following statement true (T) or false (F)
False
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A decrease in expected profit
A) lowers the equilibrium real interest rate. B) decreases the supply of loanable funds. C) increases the supply of loanable funds. D) increases the demand for loanable funds. E) raises the equilibrium real interest rate.
According to Joseph Schumpeter, the theory of creative destruction describes a process by which
A) some new products unleash a gale of destruction that drive other new products out of the market. B) the creation of new products never involves the destruction of old products. C) new products unleash a gale of destruction that drives old products out of the market. D) new products are created by the destruction of capital.
In response to banks entering into the insurance business, insurance companies have started to supply ________ insurance
A) debt B) credit C) equity D) currency
Suppose a bank has demand deposits of $100,000 and the legal reserve requirement is 20 percent. If the bank currently has $100,000 in reserves, it could expand the money supply by as much as
a. $100,000 b. $400,000 c. $0 d. $20,000 e. $80,000