Companies most likely use the foreign-exchange market to ________.
A) diversify their expenses from other sources
B) convert money for use in financial transactions
C) increase their presence on the black market
D) acquire currency from emerging markets
B) convert money for use in financial transactions
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Returns to specialization can occur when
A) increasing the amount of labor allows workers to specialize. B) the exponents of the Cobb-Douglas production function are greater than 1. C) a firm doubles its inputs. D) the average cost curve is above the marginal costs curve.
According to the efficient markets hypothesis, which of the following would decrease the price of stock in Veblen's Leisure Company?
a. Veblen announces, just as everyone had expected, that it has fired its CEO who has been accused of ethics violations. b. Veblen announces, as the market had expected, that its profits were low. c. Fundamental analysis published by KM Financial shows that Veblen's stock is undervalued. d. A highly anticipated book is published by a Veblen insider which details Veblen's innovative technology in plain English, information that was previously unavailable to the public and which will now be used by Veblen's competitors.
Economist's can justify supporting education through taxation on which of the following grounds?
A) Education generates spillover benefits.
B) Low-income people could not otherwise afford education.
C) Most economists are educators.
D) Free education extends equal opportunity to all.
E) Public education is more efficient than allowing education to be provided by the market.
Some economists argue that Okun's Law overstates the cost of cyclical unemployment because
A. the cost of retraining workers must be offset against the loss in output that occurs when workers are unemployed. B. it ignores the fact that leisure increases during a recession. C. if efficiency wages prevail, and workers are paid their real wage, already employed workers will reduce their effort, reducing output. D. it ignores the loss of government revenue and additional government expenditures that occur when unemployment rises.