An example of an investment is
A. the purchase of a Hewlett Packard laser printer for use by a business.
B. the purchase of a share of Google stock.
C. the purchase of an Exxon Mobil bond.
D. all of the above.
Answer: A
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________ policy changes are made through the legislative process, while ________ policy changes are made by the Federal Open Market Committee.
A. monetary; fiscal B. monetary; international C. fiscal; monetary D. fiscal; international
Real GDP can be criticized as a measure of economic welfare because it
A) does not include the value of products produced in the household. B) does not take account of the degradation of environmental quality. C) does not include leisure time available to a society. D) All of the above answers are correct.
A perfectly competitive firm is more likely to shut down during a recession, when the demand for its product declines, than during an economic expansion, because during the recession it might be unable to cover its
A) fixed costs. B) variable costs. C) external costs. D) depreciation due to machinery becoming obsolete.
Exhibit 7-1 Consumer Price Index Year ConsumerPrice Index 1 100 2 110 3 115 4 120 5 125 As shown in Exhibit 7-1, the rate of inflation for Year 5 is:
A. 4.2 percent B. 5 percent. C. 20 percent. D. 25 percent.