What happens to domestic investment as the real interest rate rises? Explain your answer
As the real interest rate rises, the cost of borrowing to finance capital projects rises, which reduces investment.
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Shama is producing candles in a perfectly competitive market. When she produces 500 candles, her total cost is $250. If she produces one additional candle, her total cost increases to $260
In order to maximize her profit, she should produce the additional candle A) if the market price for a candle is $12. B) only if the market price exceeds $260 for a candle. C) only if the market price exceeds $250 for a candle. D) if the market price for a candle exceeds $0.50. E) if her price exceeds her average total cost.
Price ceilings set below the equilibrium create:
a. externalities. b. unemployment. c. shortages. d. surpluses.
Most economists believe that the higher average salaries earned by men in comparison to women arise from
a. discrimination. b. a variety of factors, including differences in human capital and compensating differentials; few economists believe that gender discrimination in earnings exists. c. differences in human capital as the primary reason. d. a variety of factors, including differences in human capital, compensating differentials, and discrimination.
Which one of the following is a leakage from the circular flow of income?
(a) Exports. (b) Taxation. (c) Investment. (d) Externalities.