Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be invested in government bonds earning 7%, then how much money should Jan's hold?
A. $4,000
B. $8,000
C. $10,000
D. $6,000
Answer: D
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Use the figure above to answer this question. At a price level of 90
A) people will be forced to cut consumption so that aggregate demand will decrease. B) the aggregate quantity demanded exceeds real GDP and inventories will decrease. C) inventories increase and firms will increase production. D) the aggregate quantity demanded exceeds real GDP, inventories increase and the price level will rise.
In the case in Scenario 18.1, the Coase theorem specifies that
A) the result will be different if the fishermen are given the right to clean water than it will be if the factory is given the right to use the water as it sees fit, but the result will be inefficient in either case. B) the efficient result will occur whether the fishermen are given the right to clean water or the factory is given the right to use the water as it sees fit. C) economic efficiency requires that the fishermen be given the right to clean water. D) economic efficiency requires that no one may contaminate the water. E) economic efficiency requires that the fishermen be given the right to clean water and that the factory be given the right to use the water as it sees fit.
Last year a firm made 1,000 units of its product available at a price of $5 per unit. This year the firm will still make 1,000 units available, but only if the price is $7 per unit. What is most likely to have happened?
a. Supply has increased b. Supply has decreased c. Demand has decreased d. Quantity demanded has increased e. Quantity supplied has increased
This president made the campaign promise: "Read my lips: no new taxes." ______________.
Fill in the blank(s) with the appropriate word(s).