A firm's stock price will be higher when the interest rate is ____ and the value of the firm's expected future profits are ____
a. lower; larger
b. lower; smaller
c. higher; larger
d. higher; smaller
A
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A monopoly can set any price it wants. So why does it still produce at a point where MR = MC, just like a perfectly competitive firm?
What will be an ideal response?
Financial innovation is
A) the process of turning assets into a more liquid form. B) the development of new financial products and services. C) responsible for credit cards being included as part of money. D) causing a decrease in bank profits.
A current account deficit
A) will not pose a problem, especially if it is accompanied by an expansionary fiscal policy. B) may pose no problem if the borrowed funds are channeled into productive domestic investment projects that pay for themselves with the revenue they generate in the future. C) may still pose a problem, even if the borrowed funds are channeled into productive domestic investment projects. D) There is no relation between current account surplus and between savings and investment. E) will pose a problem because the country is borrowing funds from the rest of the world that it won't be able to pay back later.
In economics, all the items that people would consume if they had unlimited income are known as
A) wants. B) aggregates. C) outputs. D) needs.