Basically, the marginal principle helps us to evaluate the factors involved in taking an action or if doing something is worth the effort.
Answer the following statement true (T) or false (F)
True
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A distinction between stocks and bonds is that
A) although the return on a bond is determined by the forces of supply and demand, the return on a stock is set by the stock exchange. B) stocks represent ownership claims to the company and bonds do not. C) bonds must be held for a fixed number of years whereas stocks can be bought and sold at any time. D) bonds can be traded many times in the bond market, while stocks are non-transferable. E) bonds cannot be sold to anyone other than the company that issued it while stocks can be resold to anyone.
The cross elasticity of demand for butter and margarine is likely to be
A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods.
During an inflationary period, policy makers who use the AS/AD model would probably recommend an open market:
A. sale of government securities that reduces interest rates. B. purchase of government securities that raises interest rates. C. purchase of government securities that reduces interest rates. D. sale of government securities that raises interest rates.
Monopolistic competition is characterized by firms:
A. Producing differentiated products B. Making economic profits in the long run C. Producing at optimal productive efficiency D. Producing where price equals marginal cost