What functions does capital income serve in the economy?
What will be an ideal response?
Interest serves as an incentive to postpone gratification. Profit serves as a reward for innovation and risk taking.
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In Delaware County, Pennsylvania, all homes, businesses, and other organizations purchase their water from one seller, Philadelphia Suburban Water Co (PSWCo)
Economists refer to public utility companies like PSWCo as natural monopolies because their A) marginal cost curves lie everywhere beneath their average fixed cost curves. B) marginal cost curves lie everywhere beneath their demand curves. C) average total cost curves lie everywhere above their demand curves. D) None of the above answers is correct.
Margin calls are more likely to happen when markets are:
A. crashing. B. booming. C. stable. D. irrational.
Which of the following factors contribute to economic growth?
a. the construction of new factories b. an increase in the proportion of the population that is college-educated c. a decrease in the productivity of labor d. only (a) and (b).
How much additional money will be created if you deposit a $200 check into your bank, which holds a 10% reserve ratio?
A. $200 will be created since your checking account balance has increased by $200 B. $180 since the bank will keep 10% of your $200 check in reserves and lend the other 90% C. $2,000 since the money multiplier will be equal to 10 and reserves have increased by $200 D. No money will be created since the $200 check does not represent an increase in reserves