If you lost 50 percent on $100 worth of stock in a 3x margin account, then you would lose:
A. $600.
B. $300.
C. $50.
D. $150.
Answer: D
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Employing Figure 4-2 above, the money market is initially in equilibrium at point G and after the economy moves to equilibrium, the Federal Reserve increases the money supply by 500. We would observe
A) the interest rate first rises to 7.5% and Y to 3500. B) the interest rate first rises to 7.5% then falls to 5%. C) Y rises to 4000 as interest rates remain stable. D) the economy moves from point G to C, to F then D.
Robert left a law firm to begin his own catering business. Robert’s salary at the law firm was $100,000. He put $40,000 of his own funds into the business to purchase cooking equipment. His funds were previously earning 10 percent per year. The cost of operating the business including food and supplies was $60,000. Robert’s catering firm earned $170,000 in revenues for the first year. Robert’s brother insists that he should go back to the law firm, since he was making $100,000 there. Robert says his brother is wrong. Robert is right because
A. he is making $6,000 in economic profits. B. he is making $110,000 in accounting profits. C. he is making $106,000 in economic profits. D. he likes cooking.
An efficient allocation of productive inputs requires that:
a. each output has the same rate of technical substitution among inputs used. b. each output has the same marginal rate of substitution for consumers. c. each pair of outputs has the same rate of product transformation. d. each individual has the same marginal rate of substitution between outputs.
Higher inflation makes relative prices
a. more variable, making it more likely that resources will be allocated to their best use. b. more variable, making it less likely that resources will be allocated to their best use. c. less variable, making it more likely that resources will be allocated to their best use. d. less variable, making it less likely that resources will be allocated to their best use.