A business cycle expansion increases income, causing money demand to ________ and interest rates to ________, everything else held constant
A) increase; increase
B) increase; decrease
C) decrease; decrease
D) decrease; increase
A
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Empirical evidence suggests that there are economics of __________ in banking for all bank sizes
A) scale and scope B) scale but not scope C) scope but not scale D) neither scale nor scope
The authors note that the goal of maximizing the market value of the firm may be more appropriate than maximizing short-run profits because:
A) the market value of the firm is based on long-run profits. B) managers will not focus on increasing short-run profits at the expense of long-run profits. C) this would more closely align the interests of owners and managers. D) all of the above
[Appendix; Advanced Material] If an airline company decides to buy smaller jets with fewer seats, then the problem of:
a. spillage and spoilage both increase. b. spillage decreases, but spoilage increases. c. spillage and spoilage both decrease. d. spoilage decreases, but spillage increases.
The experience of the Teamsters in the late 1970s and early 1980s suggests that
a. there are few restraints on the ability of a strong union to increase the wages of its members. b. product market competition with goods made from (or services provided by) nonunion labor significantly limits the ability of a union to get increased wages for its members. c. higher wages tend to stimulate aggregate demand, which makes it easier for a union to gain still higher wages. d. wages are established by the relative skill of union and management negotiators, independent of market conditions.