Economic interactions with others are necessary because
A. Resources are limited.
B. People are lazy.
C. Advertising makes us want additional goods and services.
D. Some people are rich and others are poor.
Answer: A. Resources are limited.
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Suppose that, for every 1 percentage point decline in the discount rate, commercial banks collectively borrow an additional $2 billion from Federal Reserve Banks. Also assume that the reserve requirement is 10%. If the Fed lowers the discount rate from 4.0% to 3.5%, bank reserves will ________.
A. increase by $1 billion and the money supply will increase by $10 billion B. decline by $1 billion and the money supply will decline by $10 billion C. increase by $1 billion and the money supply will increase by $5 billion D. increase by $10 billion and the money supply will increase by $100 billion
"Bootstrap financings" are buyouts financed by
A) the company managers' own assets. B) finance companies. C) junk bonds. D) new issuance of bonds.
If a country has a flexible exchange rate, will high rates of inflation, though generally harmful, price this country's goods off world markets? Explain.
What will be an ideal response?
Which of the following expressions represents the real exchange rate (?)?
A) E/P. B) EP/P. C) EP. D) EP/P. E) none of the above