Banks cannot fail, even when they make a large number of bad loans
Indicate whether the statement is true or false
F
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Economists classify energy and water as part of which factor of production?
A) land B) labor C) capital D) entrepreneurship E) land if undeveloped and capital if developed
Assume that the reserve—deposit ratio is 0.4. The Federal Reserve carries out open-market operations, purchasing $1,000,000 worth of bonds from banks. This action increased the money supply by $1,750,000. What is the reserve—deposit ratio?
A) 0.2 B) 0.3 C) 0.4 D) 0.5
Hot dog vendors on the beach fail to cooperate with one another on the quantity of hot dogs they should sell to earn monopoly profits. A consequence of their failure is that, relative to the outcome the vendors would like, (i) the quantity of hot dogs supplied is closer to the socially optimal level. (ii) the price of hot dogs is closer to marginal cost. (iii) the hot dog market at the beach is
less competitive. a. (i) and (ii) b. (ii) and (iii) c. (i) and (iii) d. (iii) only
Predatory pricing:
A. is when a firm intimidates others to maintain the high prices the largest firms set. B. is an aggressive business move to maintain market power. C. was used by DeBeers to maintain control over the diamond market. D. All of these statements are true.