Corn is used to produce tortillas. If the price of corn increases
A) the demand for tortillas decreases. B) the supply of tortillas increases.
C) the supply of tortillas decreases. D) the demand for tortillas increases.
C
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Moral hazard is a barrier to financing global growth because
A) of the differences between financing using loans, portfolio investment and foreign direct investment. B) there is the possibility that the funds are used for riskier behavior than the lender agreed to. C) firms sometimes have trouble determining whether they need funds or not. D) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms.
If the MPC is 0.75, the multiplier is equal to
A) 5. B) 0.75/0.25 = 3. C) 0.25. D) 4.
Which of the following is NOT an effect from a change in the federal funds rate?
A) change in the real interest rate B) change in investment C) change in government expenditures D) change in aggregate demand E) change in the quantity of money
Total surplus or gains created from trade equal
a. Seller surplus b. Buyer surplus c. The summation of seller and buyer surplus d. Profits earned by a firm