If the absolute price of a new car is $40,000 and the relative price of a laptop computer in terms of cars is 1/40 of a car, it follows that the absolute price of the laptop is
A) $10,000.
B) $1,000.
C) $4,000.
D) $2,000.
E) $1,500.
B
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Ford Motor Corporation is considering purchasing new technology that will increase productivity by twenty percent. If Ford Motor Corporation decides to make this investment at the going real interest rate, then
A) Ford's profits will decline. B) the demand for loanable funds increases. C) the supply of loanable funds increases. D) the quantity of loanable funds demanded increases. E) saving increases.
Why is plowback the overwhelming favorite among choices of sources of funds for financing corporate investment?
What will be an ideal response?
Suppose the economy is operating below potential output. If policy makers try to avoid a budget deficit by raising taxes or reducing government spending, these actions would:
A. increase inflation. B. help pull an economy out of a depression. C. make a recession worse. D. negate the multiplier effect.
The opportunity cost of leisure will fall if
A. nonlabor income increases. B. the wage rate increases. C. the wage rate decreases. D. nonlabor income decreases.