Which of the following is considered to be the main disadvantage of the sole proprietorship form of business organization?
a. The proprietor and the firm are legally inseparable.
b. The proprietor has personal independence.
c. The focus of the proprietorship is on local markets.
d. The access to local and family labor promotes legal dependence.
e. The lack of a bureaucratic structure impedes growth.
A
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
The discount rate is
A) the interest rate paid when a bank borrows reserves from another bank. B) the interest rate paid when a commercial bank borrows reserves from the Fed. C) the reduction in the interest rate given to the bank's best customers. D) another name for the long-term interest rate. E) the interest rate the Fed pays banks for the reserves the banks keep at the Fed.
If there is an excess demand for money, individuals ________ bonds, causing interest rates to ________
A) sell; rise B) sell; fall C) buy; rise D) buy; fall
The law of one price states that if transportation costs are relatively small, then the:
A. price of an internationally traded commodity must be the same in all locations. B. nominal exchange rates for every country's currency must be equal. C. nominal exchange rate for a currency must equal the real exchange rate for that currency. D. producer with the lowest opportunity cost should be the only producer any commodity.