The invention of machinery that can double the amount of gold extracted from raw ore will likely:
a. raise the world price of gold to pay for the new machinery
b. lower the world price of gold because any given amount can now be produced more cheaply.
c. raise the world price of gold because miners' wages must double as their productivity doubles.
d. lower the world price of gold only if new mining companies are not allowed to enter the industry.
b
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Comparing how many dollars it takes to attend college each year to annual earnings on a job represents the use of money as a:
a. medium of exchange. b. unit of account. c. store of value. d. store of coincidence.
In the macroeconomy, demand-side shifts change:
A. only the price level in the long run, while output eventually returns to its long-run potential level. B. only the output level in the long run, while prices eventually return to their long-run potential levels. C. aggregate demand only, which eventually shifts back in the long run. D. aggregate demand only, which is why the price level remains unaffected in the long run.
The intrinsic value of a call option:
A. will be negative if the time value of the option is negative. B. is the difference between the option price and the interest rate. C. is the greater of zero or the difference between the price of the underlying asset and the strike price. D. must be less than or equal to zero.
In terms of business strategy, managers will attempt to adopt business strategies that
A. stabilize opportunity costs. B. minimize transaction costs. C. minimize sunk costs. D. maximize transaction costs.