If a firm buys a building so as to have office space for its workers, the monthly opportunity cost of the building is best measured as
A) the monthly mortgage payment the firm must pay.
B) the price the firm paid divided by twelve.
C) zero.
D) the rent the firm could earn if it rented the building to another firm.
D
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If the liquidity effect is smaller than the other effects, and the adjustment to expected inflation is slow, then the
A) interest rate will fall. B) interest rate will rise. C) interest rate will initially fall but eventually climb above the initial level in response to an increase in money growth. D) interest rate will initially rise but eventually fall below the initial level in response to an increase in money growth.
Your professor loves her work, teaching economics. She has been offered other positions in the corporate world that would increase her income by 25 percent, but she has decided to continue working as a professor. Her decision would not change unless
a. the marginal cost of teaching increased. b. the marginal benefit of teaching increased. c. the marginal cost of teaching decreased. d. the marginal benefit of a corporate job decreased.
A bank that has 10k in excess reserves can extent new loans up to a maximum of
What will be an ideal response?
The effect of a tariff or a quota is to
A. raise the price of a commodity in the exporting country above the price in an importing country. B. raise the price of a commodity in an importing country above the price in the exporting country. C. lower the price of the commodity in all countries. D. raise the price of the commodity in all countries.