Which of the following assets is most liquid?
A. Short-term government bonds
B. Savings accounts
C. Checking accounts
D. Currency and coins
Answer: D
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If firms must pay full liability for accidents plus punitive damages, then
a. the private costs of firms' activities will be equal to the social costs. b. firms will have an incentive to make efficient choices. c. social welfare will be higher than if no punitive damages were assessed. d. firms will undertake less activity than would be socially optimal.
In a second-price sealed-bid auction, ________
A) bidders submit their bids privately B) bidders place their bids one after another C) bidders know each other's bid D) bidders bid above their willingness to pay
Sally quit her job as an auto mechanic earning $50,000 per year to start her own business. To save money she operates her business out of a small building she owns which, until she started her own business, she had rented out for $10,000 per year
She also invested her $20,000 savings (which earned a market interest rate of 5% per year) in her business. You are given the following information about the first year of her operations. Total revenue $120,000 Cost of labor 40,000 Cost of materials 15,000 Equipment rental 5,000 a. Calculate her economic costs. b. Calculate her accounting costs. c. Calculate her implicit costs. d. Sally tells you that she would really like to move to a location closer to town but she decided against it because "right now I don't pay any rent and it will cost me $10,000 a year to rent near town." Do you agree with her reasoning?
If a bank receives a new checkable deposit of $10,000 . and the required reserve ratio is 20 percent, then the bank can lend out:
a. $2,000. b. $10,000. c. $40,000. d. $8,000. e. $0.