Which of the following best describes private enterprise?
a. The means of production (resources and businesses) are owned and operated by government.
b. The means of production (resources and businesses) are owned and operated by private individuals or groups of private individuals.
c. Economic decisions are determined by individuals.
d. Economic decisions are determined by government.
b. The means of production (resources and businesses) are owned and operated by private individuals or groups of private individuals.
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Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only form of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of
A. $2,000.
B. $8,000.
C. $9,000.
D. $10,000.
Suppose a bond promises to pay its holder $100 a year forever. The interest rate on the bond rises from 4 percent to 5 percent. The price of the bond
A) falls from $2,500 to $2,000. B) does not change because it is not affected by the interest rate. C) falls from $25,000 to $20,000. D) rises from $2,000 to $2,500.
The best known financial auction market is the
A) New York Stock Exchange. B) American Stock Exchange. C) Pacific Stock Exchange. D) Nasdaq.
If land and capital are complementary resources and the price of land goes down, the employment of capital ______.
Fill in the blank(s) with the appropriate word(s).