Capital losses are:
A. the destruction of plant and equipment.
B. decreases in the flow of investment.
C. decreases in the value of existing assets.
D. decreases in the flow of saving.
Answer: C
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Federal transfers are expected to grow significantly in the coming decades, due especially to increases in ________
A) federal government consumption B) federal deficits C) Medicare and Medicaid D) Social Security payments
Economies of scale exist when
a. long-run average costs decline as output increases. b. long-run average costs are constant. c. long-run average costs increase as output increases. d. short-run average costs decline. e. short-run average costs increase.
Congressman Smith and Congresswoman Johnson both consider themselves advocates for the national parks and are introducing different bills designed to benefit the parks. Congressman Smith's bill calls for an increase in the entrance fees. Congresswoman Johnson's bill calls for a decrease in the entrance fees. Which of the bills would be more effective at ensuring the quality of the national parks?
a. Congressman Smith's bill because it will reduce the overuse of the parks b. Congresswoman Johnson's bill because more visitors means more citizens will value and care for the parks c. Both bills would be equally effective. d. Neither bill would be effective.
Ceteris paribus, in the long run, a tax placed on a perfectly competitive industry will
A. be borne entirely by the firm. B. be entirely borne by the consumer. C. increase the price of the good by an amount less than the tax. D. increase the price of the good by an amount equal to the tax.