A firm's capital is measured as a ________ while investment in new capital is measured as a ________.
A. stock; flow
B. flow; stock
C. physical amount; dollar value
D. stock; change
Answer: A
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A call option has a strike price of $80. If the underlying stock is selling for $83 on the expiration date, the intrinsic value of the call option is __________ per share
A) $163 B) $83 C) $3 D) $0
If a technological breakthrough reduces input quantities needed to produce some item,
A. cost of production will be increased. B. the price of the product will rise. C. the price of the product will fall. D. quantity demanded of the product will fall.
The most effective and frequently used tool the Fed has to increase or decrease the economy's money supply is
a. open market operations b. changes in the legal reserve requirement c. changes in the discount rate d. changes in the federal funds rate e. moral suasion
If a business's total economic cost of producing 2,000 units of a product is $1,000,000 and this output is sold to consumers for $1,300,000, then the firm would earn an economic profit of:
a. $1,300,000 b. $1,000,000 c. $300,000 d. $200,000