Businesses will generally shut down if they lose money for one or two years.
Answer the following statement true (T) or false (F)
False
New companies almost always lose money at first, and even established companies lose money during a recession. A business shuts down when it becomes clear that the business will continue to lose money-when there is no end in sight for its losses.
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Relative to GDP, interest on the national debt
a. has grown at a steady rate during the last 40 years b. has remained constant in recent decades c. grew especially rapidly during the 1980s d. declined slightly during the 1980s e. fluctuates as retirement portfolios change their allocation of government securities
The price elasticity of demand for labor will be smaller, the
A) smaller is the price elasticity of demand for the final product. B) easier it is to employ substitute inputs in production. C) larger is the proportion of wage costs in the total cost of production. D) longer is the time period under examination.
The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption is known as the:
a. real balances effect. b. interest rate effect. c. foreign purchases effect. d. income effect. e. aggregate demand effect.
Which of the following is true?
a. A budget deficit will have no impact on the national debt. b. A budget deficit will increase the national debt. c. A balanced budget will increase the national debt. d. A budget surplus will increase the national debt.