If a firm needs one machine to produce a product, and must replace the machine when it wears out, then the firm should pick a durability level of the machine that
A) minimizes the expense today.
B) minimizes the present discounted cost of having the machine forever.
C) maximizes the future value of the machine.
D) minimizes the future value of the machine.
B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The purchasing power parity theory is limited in its applicability by the facts that some goods are not internationally traded and some countries impose tariffs on imported goods
a. True b. False Indicate whether the statement is true or false
Refer to Table 9-5. The required reserve ratio is 10%. What is the maximum amount of new loans that Bolton bank can create and by how much can Bolton initially increase the money supply, assuming that newly created deposits are transferred to another bank?
A) $30 million; $30 million B) $70 million; $30 million C) $70 million; $70 million D) $70 million; $700 million
In an aggregate demand and aggregate supply graph, an expansionary fiscal policy can be best illustrated by a:
A. leftward shift in the aggregate demand curve. B. change in the price level. C. leftward shift in the aggregate supply curve. D. rightward shift in the aggregate demand curve.