Which of the following investments can be classified as specific assets?
a. Opening a restaurant in the business district of a city.
b. Purchase of additional cotton bales expecting a rise in demand for cotton garments.
c. Leasing out land in a tourist spot to build a retail outlet.
d. Purchasing specialized equipment for a hydro-electric power project that will not produce electricity at a different location.
D
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When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is ________ than the other money supply effects and there is ________ adjustment of expected inflation
A) larger; fast B) larger; slow C) smaller; slow D) smaller; fast
An efficiency wage is a wage that:
A. the government sets deliberately above the market rate to increase equity. B. most unionized workers negotiate to get rid of. C. is deliberately set above the market rate to increase worker productivity. D. is set right at market equilibrium which creates an efficient labor market.
The unavailability of low-cost insurance contracts decreases the risks of liability for a traffic accident and increases the number of accidents
Indicate whether the statement is true or false
When the Fed sells government securities, it
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans b. raises the cost of borrowing from the Fed, discouraging banks from making loans c. increases the amount of excess reserves that banks hold, encouraging them to make loans d. increases the amount of excess reserves that banks hold, discouraging them from making loans e. decreases the amount of excess reserves that banks hold, discouraging them from making loans