Economists use the term ________ to refer to the creation of new capital.
A. finance
B. entrepreneurship
C. investment
D. depreciation
Answer: C
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What role do households play in capital markets?
What will be an ideal response?
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Country B has the _______________ advantage in the production of tablets, which means they should specialize in __________________.
A. comparative; tablets B. absolute; tablets C. comparative; iPods D. absolute; iPods
Purchasing power parity holds when the exchange rate is equal to the product of the foreign price level and the domestic price level
a. True b. False Indicate whether the statement is true or false
The money market achieves equilibrium when
a. individuals no longer want to spend their money b. the price of bonds rises by an appropriate amount c. buyers and sellers agree on a price for commodities d. speculative balances are reduced to a minimum e. individuals who hold bonds are satisfied with what they are holding