If we are going to get the most value from our resources, entrepreneurs should choose the investment alternatives that
What will be an ideal response?
yield a profitable rate of return.
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When interest rates fall, a bank that perfectly hedges its portfolio of Treasury securities in the futures market
A) suffers a loss. B) experiences a gain. C) has no change in its income. D) may either gain, lose or see no change in its income.
If a firm can borrow or lend at a 6 percent annual interest rate, it will
a. buy more capital if it has the funds on hand than if it has to borrow them b. ignore the market rate of interest when making capital investment decisions c. buy less capital if it has the funds on hand than if it has to borrow them d. ignore the market rate of interest when making saving decisions e. buy the same amount of capital whether it has the funds on hand or has to borrow them
A tax on an imported good is called a ______
Fill in the blank(s) with correct word
When the Fed buys government securities, it:
A. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. B. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. C. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. D. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.