When existing firms in a competitive market are profitable, an incentive exists for
a. new firms to seek government subsidies that would allow them to enter the market.
b. new firms to enter the market, even without government subsidies.
c. existing firms to raise prices.
d. existing firms to increase production.
b
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Stockholders receive returns on their financial investment in the form of ________ and ________.
A. coupon payments; capital gains B. interest payments; dividends C. capital gains; interest payments D. capital gains; dividends
The ________ rate represents the difference between the spot and forward price
A) profit B) swap C) spread D) risk
In the perfectly competitive market, all firms in the market are assumed to be producing:
a. identical products. b. differentiated products. c. products that are heavily advertised. d. complementary products.
In the Wealth of Nations, Adam Smith wrote about how countries could increase their consumption of goods and services through specialization and trade with other countries
a. True b. False Indicate whether the statement is true or false