Financial capital is
A. the foreign exchange market.
B. funds used to purchase capital goods.
C. assets of financial institutions.
D. the collection of stock and bond exchanges around the country.
Answer: B
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Imposing an employment tax leads to
A) a decreased supply of labor. B) more employment. C) decreased potential output in the economy. D) greater demand for labor.
A perfectly competitive firm cannot practice price discrimination because
A) each consumer in a perfectly competitive market has the same willingness to pay. B) the firm can only charge the market price. C) a firm that breaks even in the long run cannot afford to engage in yield management. D) it does not advertise; this prevents the firm from marketing its product to different segments of the market.
A monopsonist will hire labor up to the point where
a. the marginal expense of labor is minimized. b. the marginal physical productivity of labor is maximized. c. the marginal expense of labor is equal to marginal revenue. d. the marginal expense of labor is equal to the marginal value product of labor.
The reason that the Fed does not actively use discount rate policy to control the money supply is because the Fed
a. acts when a majority of member banks agree on policy and the banks rarely agree. b. earns interest on discounting and cannot afford to lose the revenue. c. does not know how banks will respond to discount rate changes. d. has been directed by Congress to set the discount rate at a permanent level.