If a firm spends money on advertising, its gross profit is ________ its net profit.
A) greater than
B) exactly twice
C) equal to
D) less than
A) greater than
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Because stockholders are owners who risk their money in a corporate venture, they can be considered the corporation's
a. bondholders as well b. silent managers c. liability d. entrepreneurs e. non-paid employees
Which of the following is true regarding value and exchange?
a. Middlemen fail to create value since they do not expand the supply of physical goods. b. A good or service has a given value regardless of who uses it or how it is used. c. If it were not for middlemen, transaction costs would be zero. d. Voluntary exchange creates value by channeling goods into the hands of people who value them most.
In the context of the aggregate-demand curve, when the price level increases, households increase their holdings of money, interest rates increase, and spending on investment goods decreases because of the ________ effect.
a) wealth b) interest-rate c) exchange-rate d) net-export
One cause of the 2008 financial crisis was that many mortgage brokers were ______.
a. warning borrowers not to borrow too much b. discouraging borrowers from using new hybrid loans c. encouraging borrowers to borrow more than they could afford d. promoting fixed-rate mortgages instead of adjustable-rate mortgages