Saving is an example of
A. exchanging capital for cash.
B. trading future benefits for present benefits.
C. trading present benefits for future benefits.
D. exchanging scarce resources for unlimited resources.
Answer: C
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If Second National Bank has more rate-sensitive liabilities then rate-sensitive assets, it can reduce interest rate risk with a swap that requires Second National to
A) pay fixed rate while receiving floating rate. B) receive fixed rate while paying floating rate. C) both receive and pay fixed rate. D) both receive and pay floating rate.
Refer to Figure 9.3. If the government establishes a price ceiling of $1.00, consumer surplus will
A) fall by $50. B) fall by $150. C) remain the same. D) rise by $50. E) rise by $150.
Assume that product X has a negative cross elasticity with respect to shoes. If the price of shoes rises
A) the demand for product X will decrease. B) the quantity demanded for product X will increase. C) the demand for shoes will fall. D) the demand for product X will increase.
Which of the following markets most closely matches the description of perfect competition?
a. Fast-food hamburgers. b. Subcompact cars. c. Grain. d. Personal computers.