In the U.S. balance of payments, purchases of foreign assets by U.S. residents are tabulated as a:
A. unilateral transfer.
B. capital outflow.
C. current account outflow.
D. capital inflow.
Answer: B
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Which of the following will happen if a new firm enters in an oligopoly with differentiated products?
A) Market price will fall. B) Market price will rise. C) Existing firms will gain market share. D) Each firm will have an equal market share.
Dumping can never be a profit maximizing strategy for a firm to follow
Indicate whether the statement is true or false
A takeover of one firm by another
A. ties up the nation’s capital wastefully. B. uses up the economy’s credit supply. C. reduces the value of the acquired firm. D. changes the ownership of the acquired firm.
One of the reasons that successful proprietors may be reluctant to borrow money from a bank to expand their business is that
a. expanded businesses generally generate lower rates of profit b. the bank would become a part owner c. unlimited liability cramps ambition d. the bank's liability insurance isn't sufficient to cover expected liabilities e. issuing stock to finance the expansion is less costly