The opportunity cost of holding excess reserves will be lower at an 8 percent federal funds rate in comparison to a 10 percent federal funds rate
a. True
b. False
Indicate whether the statement is true or false
True
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When a firm builds a new factory, this is an example of an investment in:
A. human capital. B. physical capital. C. research and development. D. the market.
The concept of net domestic investment refers to ________.
A. the difference between the market value and book value of outstanding capital stock B. the amount of machinery and equipment used up in producing the GDP in a specific year C. gross domestic investment less net exports D. total investment less the amount of investment goods used up in producing the year's output
If firms in a competitive industry independently operate to maximize profits, the ________ are eventually equalized across the firms
A) total costs B) marginal costs C) profits D) revenues
Under the Classical assumptions, an increase in government spending causes
A) income to rise. B) income to fall. C) interest rates to rise. D) interest rates to fall.