The Eye of Horus incense company has $10 million in cash which it has accumulated from retained earnings. It was planning to use the money to build a new factory. Recently, the rate of interest has increased. The increase in the rate of interest should
a. not influence the decision to build the factory because The Eye of Horus doesn't have to borrow any money.
b. not influence the decision to build the factory because its stockholders are expecting a new factory.
c. make it more likely that The Eye of Horus will build the factory because a higher interest rate will make the factory more valuable.
d. make it less likely that The Eye of Horus will build the factory because the opportunity cost of the $10 million is now higher.
d
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Refer to the graph shown. If this monopolist charges a price of $8 for its product, it:
A. maximizes profit. B. incurs losses. C. can increase profits by increasing output. D. earns zero economic profits.
Mortgage-backed securities became a significant issue because I. housing prices fell across all regions. II. these securities were not as widely distributed as previously thought.
A. I only B. II only C. Both I and II D. Neither I nor II
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
Private property rights involve
A) exclusive rights to use, transfer, and exchange the property. B) exclusive rights to use property, but not to exchange the property. C) rights to enjoy the property in any way desired but not to transfer or exchange the property. D) rights granted by the government for renewable terms of 100 years or more.