Credit unions made it through the 1980s in relatively good shape because
A) most of their depositors were individuals.
B) most of their depositors were businesses.
C) they held many mortgages among their assets.
D) they held no mortgages among their assets.
D
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Refer to Figure 3-5. In a free market such as that depicted above, a surplus is eliminated by
A) a price decrease, decreasing the supply and increasing the demand. B) a price increase, increasing the quantity supplied and decreasing the quantity demanded. C) a price increase, increasing the supply and decreasing the demand. D) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.
Suppose you paid $500,000 for an asset. You hold the asset for five years. The interest rate that you get for the asset is 10%. Assume the tax rate on capital gains is 20%.
(A) If capital gains are taxed only when the asset is realized, how much will you have earned on the asset? (B) Suppose that capital gains are taxed annually instead of at realization. How much will you have earned on the asset? (C) How big is the difference in the two taxing schemes?
When new firms enter a perfectly competitive market,
a. economic profits of existing firms will continue to be zero. b. entering firms will earn zero economic profit upon entry into the market. c. existing firms may see their costs rise if more firms compete for limited resources. d. prices will rise as existing firms raise prices to keep new firms out of the market.
If costs decrease, what happens to the aggregate supply curve?
What will be an ideal response?