Refer to Scenario 7.4 below to answer the question(s) that follow.SCENARIO 7.4: You own and are the only employee of a company that sells custom embroidered pet sweaters. Last year your total revenue was $120,000. Your costs for equipment, rent, and supplies were $30,000. To start this business you invested an amount of your own capital that could pay you a $50,000 a year return.Refer to Scenario 7.4. A yearly normal return for your company would be
A. $40,000.
B. $50,000.
C. $70,000.
D. $90,000.
Answer: B
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The gold standard prevented a nation from controlling its domestic economy through monetary policy.
Answer the following statement true (T) or false (F)
Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1000 - 5000rw. If rw = 0.05, and output = 5000, then absorption equals
A) 5100. B) 5050. C) 4950. D) 4900.
If households spend $0.75 of each additional dollar of increased income, the expenditure multiplier will be
A) 1.33. B) 4. C) 5. D) 7.5.
During the housing market and financial crises of 2007 and 2008, the Fed increased the volume of discount loans in an attempt to
A) reassure financial markets and promote financial market stability. B) stabilize prices and reduce the growing inflation rate. C) eliminate structural unemployment to lower the unemployment rate. D) attract foreign investment and stabilize interest rates.