A sale of securities by the Fed causes
A. a contraction of the money supply equal to the amount of the securities sold.
B. a multiple expansion of the money supply greater than the amount of the securities sold.
C. a multiple contraction of the money supply greater than the amount of the securities sold.
D. an expansion of the money supply equal to the amount of the securities sold.
Answer: C
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Suppose in Italy producers can make 10,000 dresses or 1,000 coats per day, while in Canada producers can make 14,000 similar dresses or 2,000 similar coats per day. Therefore
A) 1 dress costs 7 coats in Italy. B) 1 dress costs 10 coats in Italy. C) 1 coat costs 7 dresses in Canada. D) 1 coat costs 10 dresses in Canada.
It is not true of profits that they
A. are what remains from the selling price after factors have been paid. B. accrue to entrepreneurs. C. account for a relatively small portion of national income. D. account for about as much national income as wages and salaries.
When firms are interdependent,
A. Then the market is perfectly competitive. B. They can act independently of one another. C. One firm can ignore other companies in the market when making decisions. D. The profit of one firm depends on how its rivals respond to its strategic decisions.
If the supply curve for land was a vertical line, then any payment made for land would be considered
A) as economic rent. B) as economic lease. C) as economic interest. D) as an opportunity lease payment.