There is an opportunity cost associated with
A. only investments made with funds received from the sale of new bonds.
B. only investments made with retained earnings.
C. only investments made with borrowed funds.
D. every investment project, no matter how it is funded.
Answer: D
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When the Fed wants to undertake open market operations, it
A) buys or sells securities through the trading desk at the New York Federal Reserve Bank. B) can require all commercial banks to buy from or sell to it. C) can require all member banks to buy from or sell to it. D) buys from or sells to the U.S. Treasury.
If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________
A) rises; decreases B) rises; increases C) falls; decreases D) falls; increases
The early 1980s "Star Wars" space-based defensive weapons system was an example of _____
a. economic warfare b. a military alliance c. negative externality d. undefined property rights
Losses are important to a competitive price-searcher market (industry) because they send a message to the market participants that
a. more resources should be devoted to a particular industry. b. resources can rise in value if diverted away from that particular industry. c. resources are allocated exactly as they should be. d. the firms should charge lower prices.