Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and the monetary base in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls and monetary base falls.
b. The real risk-free interest rate rises and monetary base falls.
c. The real risk-free interest rate falls and monetary base rises.
d. The real risk-free interest rate and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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Maximizing the lifetime value of the firm is equivalent to maximizing the firm's current profits if the:
A. growth rate of profits and the interest rate are equal. B. interest rate is larger than the growth rate in profits and both are constant. C. interest rate is smaller than the growth rate of profits. D. growth rate in profits is constant and is larger than the interest rate.
In the production of corn, millions of farmers world-wide are ________, so there is ________ on economic profits to go to zero.
A. oligopolists; pressure B. monopolists; no pressure C. perfect competitors; pressure D. oligopolists; no pressure
Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's required reserves increase by
A) $2,000. B) $8,000. C) $10,000. D) $50,000.
The percentage of U.S. industrial sales produced in industries with four-firm sales concentration ratios of 50 percent or more has remained pretty much unchanged from 1895 through 1982
Indicate whether the statement is true or false