A firm's average total cost is $80, its fixed cost is $1000, and its output is 100 units. Its average variable cost
A) is less than $40.
B) is between $40 and $60.
C) is more than $60.
D) cannot be determined without more information.
C
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With respect to the financial crisis of 2007-2009, some economists argue that financial service firms should have done a better job of assessing the risk involved in investing in mortgage-backed securities
Better governance in this context refers to which of the following? A) improving the assessment of investments. B) improving the monitoring of investments. C) improvements in aligning the actions of top managers with the preferences of shareholders D) all of the above
The theory of liquidity preference illustrates the principle that
a. monetary policy can be described either in terms of the money supply or in terms of the interest rate. b. monetary policy can be described either in terms of the exchange rate or the interest rate. c. monetary policy must be described in terms of the money supply. d. monetary policy must be described in terms of the interest rate.
Covered interest parity refers to the situation in which:
a. interest rates are the same in both currencies. b. spot and forward rates are the same in both currencies. c. the forward rate between the two currencies is equal to the ratio of their returns times the spot rate between the two currencies. d. there is an opportunity for arbitrage whenever prices are sluggish and sticky.
Which of the following is a bank asset?
A. demand deposits B. savings account deposits C. certificates of deposit held by the public D. loans made to customers