By shutting down, a firm
A) stops receiving revenue but continues to pay variable costs.
B) stops receiving revenue and is stuck with its fixed costs.
C) avoids its sunk costs as well as its variable costs.
D) can avoid paying taxes on its previously earned profits.
B
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Suppose that the required reserve ratio is 20 percent and you deposit $50,000 of currency into Comerica Bank
What is the potential increase in deposits in the banking system brought about by your deposit? What is the potential change in the money supply?
The Fed's decision to concentrate more on interest rates in conducting near-term monetary policy
A) was the result of deregulation and innovation in financial markets. B) was necessitated by the inability to identify a stable demand for money. C) is sometimes misrepresented by the media as the Fed "setting" interest rates. D) all of the above.
Which of the following is NOT considered investment?
A. A family builds a house in which it plans to live. B. A car dealer stores some of this year's models for next year. C. An individual purchases several pieces of antique furniture. D. A firm buys a computer for word processing.
When economists say goods are scarce, they mean:
A. consumers are too poor to afford the goods and services available. B. consumers are unwilling to buy goods unless they have very low prices. C. goods are generally freely available from nature in most countries. D. the desire for goods and services exceeds our ability to produce them with the limited resources available.