The demand for food is price-inelastic.
Answer the following statement true (T) or false (F)
True
There is a limit to the amount of food people want to eat. As consumption increases, the marginal benefit from eating decreases. This constraint on the demand for agricultural output is reflected in the relatively inelastic demand for food. Consumers don't increase their food purchases much when farm prices fall.
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Which of the following is an example of a financial capital?
A) A currency bill B) A check book C) A factory D) A bond
When the rate of interest in the economy falls, there will be
A) an increase in the market price of existing bonds. B) a decrease in the transaction demand for money. C) less investment by businesses. D) an increase in nominal Gross Domestic Product (GDP).
One advantage of a money market mutual fund account is that: a. it is guaranteed for a larger amount than are FDIC-insured deposits
b. it is a riskless asset. c. its holders typically earn more interest than they can with a regular bank account. d. it earns high interest and is liquid. e. it is completely liquid and riskless.
The central bank of Rudisia purchases government bonds by using the money that commercial banks keep as deposits with the central bank. It pays an interest of 2 percent on the deposits and charges the commercial banks about 2.5 percent per check for processing checks. It sends back the extra money to the government treasury. Therefore, it can be said that: a. the central bank of the country is
financially self-supporting. b. the central bank of the country acts as the treasurer of the government. c. the central bank of the country acts as the lender of the last resort of the government. d. the central bank of the country ensures that the deposits of customers are insured.