You use $50,000 of your own money to start a catering business. During the first year you earn a 5% return on that investment. If the current interest rate is 8%, you earn an economic profit of
A. -$4,000.
B. -$2,500.
C. -$1,500.
D. $4,000.
Answer: C
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On a balance sheet, short-term debts such as accounts payable are listed as
A) current liabilities. B) stockholder's equity. C) goodwill. D) current assets.
Which of the following was not true of the First and Second Banks of the United States?
a. They had branches throughout the country. b. They issued paper money. c. They made loans to private individuals. d. They set the bimetallic ratio.
When medical fee schedules are negotiated by two monopolists—one representing patients and one representing providers—the equilibrium medical fees will
a. be greater than fees determined in a competitive market. b. be less than fees determined in a competitive market. c. be greater than fees determined by provider groups alone. d. be less than fees determined by patient groups alone. e. depend on the relative bargaining strengths of the two groups negotiating the fee schedule.
If the reserve requirement is 5 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $10, then this bank
a. must increase its required reserves by $10. b. will initially see its total reserves increase by $10.50. c. will be able to make new loans up to a maximum of $9.50. d. All of the above are correct.