If Abercrombie & Fitch borrows $8 million from a bank to finance the construction of a new store, this is an example of
A) a stock market transaction.
B) direct finance.
C) a bond market transaction.
D) indirect finance.
Answer: D
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Patents encourage invention by
A) offering subsidies to inventors. B) offering tax breaks to inventors. C) allowing patent owners to make an economic profit. D) preventing inventors from working on the same project.
Credit cards do not fulfill the three functions of money
Indicate whether the statement is true or false
Which of the following describes the behavior of M1 in recent decades?
A) it soared during the recessions of 1990-91, 2001, and 2007-2009 B) it tended to grow more rapidly than M2 C) it was more stable than M2 D) it has not declined since the 1970s
The law of diminishing marginal product is NOT responsible for the shape of
A) the total cost curve. B) the average variable cost curve. C) total fixed cost curve. D) marginal cost curve.