The measure of how easily a particular asset can be converted quickly to cash without much loss of value is called:
A. liquidity.
B. intermediation.
C. risk.
D. default line.
Answer: A
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
If the reserve ratio is 4 percent, the money multiplier is equal to 25
Indicate whether the statement is true or false
A perfectly competitive firm shuts down in the short-run when the market price is less than the average variable cost
a. True b. False Indicate whether the statement is true or false
When does a resource earn only economic rent?
a. When the supply curve of the resource is relatively elastic b. When the supply curve of the resource is horizontal c. When the supply curve of the resource is vertical d. When the supply curve of the resource is relatively inelastic e. When the supply curve of the resource is backward bending