The specialized information-gathering activities that banks use to evaluate borrowers are an example of the:
A. cost-benefit principle.
B. principle of comparative advantage.
C. principle of increasing opportunity cost.
D. scarcity principle.
Answer: B
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If the demand for airline tickets to Fort Lauderdale is price elastic,
a. airline revenue will increase if supply increases b. airline revenue will increase if supply decreases c. a small change in price will cause a large shift in the demand curve d. a large change in price will cause a small shift in the demand curve e. a large change in price will cause a large shift in the demand curve
When the government is the sole depository of foreign currencies and exercises complete control over how these currencies may be used, this
a. is a violation of International Monetary Fund regulations for member countries because it denies the right of market forces to determine exchange rates b. creates equilibrium in the foreign exchange market which would otherwise not occur c. is an example of exchange controls that allow a government to maintain a fixed exchange rate d. is necessary in a floating exchange rate system to keep the market in equilibrium e. stimulates international trade because it eliminates all the uncertainty associated with floating exchange rates
Which of the following is most likely to help the residents of a nation produce more goods and services and achieve higher income levels?
A) a smaller trade sector B) a higher rate of investment C) higher tax rates D) greater use of taxation to transfer income from the rich to the poor
If a shift in aggregate demand only affects real Gross Domestic Product (GDP), then the short-run aggregate supply (SRAS) curve must be
A. downward sloping. B. horizontal. C. vertical. D. upward sloping.