Interest is the payment for the use of funds used to produce capital.
Answer the following statement true (T) or false (F)
True
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In the long run, a higher government budget deficit causes
A) a decrease in both private spending and equilibrium real GDP. B) an increase in both private spending and equilibrium real GDP. C) a decrease in private spending while equilibrium real GDP remains unchanged. D) no change in private spending but a decrease in equilibrium real GDP.
Suppose a firm anticipates that a particular R&D expenditure of $100 million will result in a new product and thus create a one-time added profit of $108 million a year later. The firm will:
A. undertake the R&D expenditure if its interest-rate cost of borrowing is 12 percent. B. undertake the R&D expenditure if its interest-rate cost of borrowing is 10 percent. C. not undertake the R&D expenditure if its interest-rate cost of borrowing is 9 percent. D. not undertake the R&D expenditure if its interest-rate cost of borrowing is 7 percent.
Refer to the diagram for the corn market. A price support of B will cause a transfer from taxpayers to farmers of:
A. 0BKL.
B. MAFG.
C. 0MFG.
D. LKCG.
Refer to the given data. On the basis of the production possibilities data shown:
Answer the question on the basis of the following production possibilities data for Landia and Scandia:
A. Landia has a comparative advantage in chips while Scandia has a comparative advantage
in fish.
B. Landia has a comparative advantage in fish while Scandia has a comparative advantage in
chips.
C. both Landia and Scandia have a comparative advantage in fish.
D. both Landia and Scandia have a comparative advantage in chips.