When the Fed raises the discount rate, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans
b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans
c. increases the amount of excess reserves that banks hold, allowing them to make more loans
d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
B
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By engaging in trade and acting in their own self interest, World War II POWs were following the economic principle of
A) division of labor. B) international trade. C) voluntary exchange. D) comparative advantage.
Southwest Airlines wants to raise $20 million to finance the renovation of their corporate offices, and the company wishes to raise the funds through direct finance. Which of the following methods could it use?
A) It could issue $20 million in stocks. B) It could sell $20 million in bonds. C) It could borrow $20 million from a bank. D) It could choose either A or B.
Over 65% of those age 85 or older are female
Indicate whether the statement is true or false
A business incurs the following costs per unit: Labor $5/unit; Materials $3/unit and rent $5000/month. If the firm produces 1000 units a month, the total variable costs equals
a. $5,000 b. $8,000 c. $13,000 d. $10,000