Since 1946, the president of the United States has received guidance from the Council of Economic Advisers
a. True
b. False
Indicate whether the statement is true or false
True
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Suppose all firms in an industry are identical. In the long run, entry and exit guarantee that all firms will have zero
a. marginal cost. b. average cost. c. economic profit. d. accounting profit.
Firms that issue callable bonds have the option of repaying the principal to the bond buyers before the stated maturity date for the bonds. Firms may call their bonds before maturity in order to avoid making some of the coupon payments
Should we expect the price of a callable bond to be higher or lower than the price of a non-callable bond that has the same coupon payment, principal, and effective yield? A) Price of the callable bond should be higher B) Price of the bonds should be the same C) Price of the callable bond should be lower D) We need to know the year in which the bond is called in order to compare the prices
If businesses forecast significant economic growth in the future, the demand for loanable funds will increase, shifting the demand curve for loanable funds to the right
a. True b. False Indicate whether the statement is true or false
Once a book has been written, would an author facing an inelastic demand curve for the book prefer to raise or lower the book's price? Why?
A. The author would raise or lower the price. Because the author's cost is a sunk cost, any increase or decrease in price will increase revenue and profit. B. The author would prefer to raise the book's price. Raising prices when demand is inelastic increases revenue. Because the author's cost is a sunk cost, profit also rises. C. The author would prefer to lower the book's price. Lowering prices when demand is inelastic increases revenue. Because the author's cost is a sunk cost, profit also rises. D. The author would not change the price. Because the author's cost is a sunk cost, any change in price will decrease revenue and profit. References