Financial instruments and money share which of the following characteristics?
A. Both can function by acting as a means of payment and allow for trading of risk.
B. Both can function as a means of payment and a store of value.
C. Both can function as a store of value even though they do not allow for trading of risk.
D. Both can function as a store of value and allow for trading of risk.
Answer: B
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Your student association is looking for an auditorium to rent for an all-day conference. The university's Performing Arts Center is vacant on that day, so the association wants to rent it
The physical plant manager tells you that the daily rent is $660, which includes $400 to cover part of the cost paid to build the Center, $40 to cover part of its regular maintenance cost, $50 to help pay for the building's insurance, $100 to cover the extra cost of electricity that the university would incur because of the conference, and $70 to pay for additional janitorial services for the conference. You know that no one else wants to rent the Center on that day and you think that the price that the manager charges is too high. But how much should you pay? Use the economic way of thinking to answer this question and to convince the manager to accept your offer: a) If you rent the Center, what will be the university's marginal cost of renting the center to you? b) If you rent the Center, what will be the university's marginal benefit of renting the center to you? c) What amount of rent should you offer? Convince the manager to accept your offer.
Increases in productivity per person lead to increases in per capita income, which we call:
A. economic growth. B. the GDP deflator. C. the producer productivity index. D. GDP per capita.
What restricts the Fed's ability to write checks and purchase U.S. securities?
a. Congress; the Fed must receive a budget allocation from Congress before it can write a check. b. The gold requirement; the Fed cannot write a check unless it has a sufficient amount of gold to back the expenditure. c. Reserve requirements; the Fed must maintain 20 percent of its assets in the form of cash against the deposits that it is holding for commercial banks. d. Nothing; the Fed can create money simply by writing a check on itself.
Which of the following supports the contention that monopolistic competitors have a strong incentive to engage in R&D?
A. Entry to monopolistic competitive industries is relatively easy and thus profit from innovation is quickly competed away. B. Most monopolistic competitive industries are decreasing-cost industries. C. The desire to differentiate products from competitors may motivate monopolistic competitors to engage in R&D. D. Monopolistic competitors have large retained earnings that are available to finance R&D.