Large countries tend to be more open than small countries
Indicate whether the statement is true or false
FALSE
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If a perfectly competitive firm is producing the short-run profit-maximizing quantity and is earning positive economic profits, the firm should anticipate ________.
A) the market equilibrium price to increase B) the market equilibrium price to decrease C) earning economic profits indefinitely D) the market supply to decrease
If the quantity demanded increases by 20 percent in response to a 10 percent decrease in price, demand is classified as:
a. unstable. b. relatively inelastic. c. relatively elastic. d. of unitary elasticity.
At equilibrium, the market will clear, with no surpluses or shortages occurring
a. True b. False Indicate whether the statement is true or false
The owner of a small business applies for a bank loan and tells the loan officer that the funds will be used to expand inventory for the upcoming holiday season. The small business finds itself in need of additional funds to meet the monthly rent for the next quarter and the owner uses the loan proceeds to pay the rent. This is an example of:
A. default risk. B. a lack of diversification for the bank. C. liquidity risk. D. information asymmetry.