Table 28.2 Firm AFirm BFirm CFirm DExternal Costs$0$________175$________Private Costs400250175200Social Costs________350$________250In Table 28.2, which firm has the greatest difference between social and private costs?
A. Firm A.
B. Firm B.
C. Firm C.
D. Firm D.
Answer: C
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A bond’s price is sensitive to changes in
A. the interest rate. B. the accepted rate of return on investment. C. investor confidence in the stability and credit worthiness of the firm. D. All of these responses are correct.
The statistical discrepancy in the balance of payments
a. is always positive b. is always negative c. is always zero d. is either positive, negative, or zero e. is indeterminate
When there is an excess supply of money,
a. people will try to get rid of money causing interest rates to rise. Investment increases. b. people will try to get rid of money causing interest rates to fall. Investment decreases. c. people will try to get rid of money causing interest rates to fall. Investment increases. d. people will try to get rid of money causing interest rates to rise. Investment decreases.
Which of the following is an accurate difference between the underground economy and nonmarket transactions?
a. The underground economy includes cleaning dorm rooms; nonmarket transactions include freelance work. b. The underground economy is prevalent in developing nations; nonmarket transactions are rare in these nations. c. The underground economy is mostly reported to the government; nonmarket transactions are unreported. d. The underground economy may involve illegal activities; nonmarket transactions involve legal activities.