One of the reasons that successful proprietors may be reluctant to borrow money from a bank to expand their business is that
a. expanded businesses generally generate lower rates of profit
b. the bank would become a part owner
c. unlimited liability cramps ambition
d. the bank's liability insurance isn't sufficient to cover expected liabilities
e. issuing stock to finance the expansion is less costly
C
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Describe the circular flow of the economy by discussing the two markets where households and firms meet
What will be an ideal response?
Which of the following best expresses the benefit from international trade?
a. With trade, each country can concentrate on producing those goods and services that it produces most efficiently. b. With trade, a country can increase its political involvement on a global scale. c. Increased U.S. trade would improve high-tech exports but not agricultural exports. d. Increased trade would increase U.S. exports and decrease U.S. imports. e. Increased trade implies that exports of goods and services will always equal imports of goods and services.
What accounts for specialization?
a. People specialize in the activity in which their opportunity costs are at a maximum. b. People specialize in the activity in which their opportunity costs are lowest. c. People do not specialize in any activity. d. People specialize in the activity that pays the highest wage. e. People specialize in the activity that they enjoy the most, no matter what the salary is.
Describe the functions of the Federal Reserve System.
What will be an ideal response?