In the short run, firms can enter an industry but not exit an industry.
Answer the following statement true (T) or false (F)
False
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Generally with bond ratings, the lower the rating, the ________ the interest rate an investor will receive and the ________ the the risk that the issuer of the bond will default
A) lower; lower B) higher; lower C) higher; higher D) lower; higher
When each stockholder incurs a tax liability on his or her share of the earnings of a corporation (whether or not the earnings are distributed), this is known as
A. being fully funded. B. full integration. C. full loss offset. D. fully imputed rent.
Adaptive expectations are "__________" according to the New Classical economists because they __________ information it is possible to use in making a forecast
A) rational; include all B) rational; exclude some C) irrational; include all D) irrational; exclude some
Suppose an investment bank buys $100 million worth of mortgage-backed securities. It finances the purchase by borrowing $90 million and using $10 million from its equity
If the value of holdings of mortgage-backed securities declines by 5%, what is its return on equity investment?