ABC Co sells newly issued bonds. JLG Co sells newly issued stocks. Which company is raising funds in financial markets?
a. only ABC
b. only JLG
c. both ABC and JLG
d. neither ABC nor JLG
c
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Can actual real GDP exceed potential GDP?
What will be an ideal response?
If the theory of purchasing power parity is correct, which of the following statements should be true in the long run?
A) The percentage change in the nominal exchange rate equals the foreign inflation rate minus the domestic inflation rate. B) The percentage change in the real exchange rate equals the foreign inflation rate plus the domestic inflation rate. C) The percentage change in the nominal exchange rate equals the percentage change in the real exchange rate minus the sum of the foreign inflation rate and the domestic inflation rate. D) The percentage change in the nominal exchange rate equals zero.
Break-even analysis usually assumes all of the following except:
a. in the short run, there is no distinction between variable and fixed costs. b. revenue and cost curves are straight-lines throughout the analysis. c. there appears to be perfect competition since the price is considered to remain the same regardless of quantity. d. the straight-line cost curve implies that marginal cost is constant. e. both c and d
In the long run, the prices charged by a firm in monopolistic competition will be
A. high enough to provide profits to the firm. B. so low that many firms will drop out of the industry. C. equal to marginal cost. D. equal to average cost, including the opportunity cost of capital.