Which of the following will most directly determine the market price of a business or physical asset?
a. cost of the asset
b. expected future net earnings derived from the asset
c. book value (original purchase price minus depreciation) of the asset
d. age of the asset
B
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The quantity of money people want to hold increases if
A) the price level falls. B) the nominal interest rate rises. C) real GDP increases. D) All of the above answers are correct.
If New York City expects that an increase in bus fares will raise mass transit revenues, it must think that the demand for bus travel is
a. elastic b. unit elastic c. inelastic d. perfectly inelastic e. 10
As the ________ becomes larger, the distance between the line of absolute equality and the ________ becomes greater.
A. Gini coefficient; Lorenz curve B. Gini coefficient; production possibilities curve C. Income distribution size; Lorenz curve D. Lorenz curve; Gini curve
In the late 1970s and early 1980s, the velocity of money increased significantly. The main reason(s) for the increase was:
A. the introduction of stock and bond mutual funds with draft writing privileges and low nominal interest rates. B. high nominal interest rates. C. the introduction of stock and bond mutual funds with draft writing privileges along with high nominal interest rates. D. as presidential election years near the velocity of money increases.