A bank's capital is:
a. the value of all its assets, including loans
b. the value of all its assets, excluding loans.
c. the value of its physical plant, including buildings, computers, and automatic teller machines.
d. the difference between its assets and liabilities.
d
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Classical economists assumed that
A) wages were inflexible. B) individuals suffered from money illusion. C) prices were sticky. D) none of the above.
Which of the following is not a criticism of flexible exchange rates?
a. All of the following. b. They are volatile, which increases risks for importers and exporters. c. They could affect employment and increase demand for trade restrictions. d. They do not allow for discretionary monetary policy. e. They allow central banks to follow expansionary monetary policies.
Suppose that a firm in monopolistically competitive market is producing 30 units of output. At this level of production, the firm charges $50 per unit. Its marginal cost is $24 and marginal revenue is $24, and average cost is $20 per unit. Given this information, in the long run you would expect
A. firms to exit the market. B. price to increase. C. firms to enter the market. D. firms to maintain their current output and price.
Given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States,
a. supply decreases, demand is unaffected, and price increases. b. demand decreases, supply is unaffected, and price decreases. c. demand and supply both decrease, leaving price essentially unchanged. d. supply decreases, demand increases, and price increases substantially.