If a bank has 1,000 depositors, each of whom deposits $1,000 in the bank, and the bank makes loans of $10,000 each, then each depositor has contributed:
A. $1 to each loan.
B. $100 to each loan.
C. $10 to each loan.
D. $1000 to each loan.
Answer: C
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Cash distributions made by government to individuals when no good or service is received in exchange are known as __________.
a. poverty payments b. taxes c. transfer payments
In the 1970s and 1980s, the United States lost its comparative advantage in consumer electronics goods to Japan. What factor was most responsible for the development of Japan's comparative advantage in consumer electronics goods?
A) Japanese firms benefited from external economies. B) Japan has abundant supplies of natural resources needed to produce electronics goods. C) Japanese firms excelled in process technology. D) Japan has abundant supplies of labor.
In the long run,
a. monopolies never earn economic profit b. economic profits and losses determine entry and exit into monopoly markets c. monopolies may earn economic profit d. competition always destroys monopoly e. government always regulates monopoly
An example of moral hazard is
a. workers working diligently even though the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds differently than the bank requires