Economics is the study of
A) the allocation of scarce resources to satisfy unlimited wants.
B) why some people want certain goods and services.
C) earning the most income.
D) ways to use fewer resources.
Answer: A
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Prior to financial deregulation, the store of value and medium of exchange functions of money were maintained separate among asset classes because the regulatory agencies
A) precluded the payment of interest by checking accounts. B) allowed the payment of interest by checking accounts. C) specifically prohibited money market stock funds. D) allowed the payment of interest on passbook savings accounts.
When a lender underestimates the rate of inflation,
a. purchasing power is redistributed to the lender. b. purchasing power is redistributed to the borrower. c. the real rate of interest will be higher than expected. d. the nominal interest rate was set too low.
Refer to Figure 29.3 for a cotton market with an equilibrium price of P1 and a Commodity Credit Corporation (CCC) loan rate set above P1. Given this situation, cotton farmers are most likely to
A. Sell their cotton on the market and repay only a portion of the CCC loan. B. Leave the cotton farming business. C. Sell their cotton on the market and repay the CCC loan with the proceeds plus other funds to make up the difference. D. Give their cotton to the CCC and not repay the loan.
When a firm maximizes total product in the short run, average product is
A. negative. B. zero. C. positive. D. Any of the above can be correct.