An economy that is operating below its full-employment capacity is experiencing a(n):
A. tax-induced recession.
B. recessionary gap.
C. inflationary gap.
D. market correction.
Answer: A
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The use of real options in capital budgeting
A) may raise the NPV of a capital project. B) makes the analysis of the project considerably easier. C) allows management to make decisions more quickly. D) eliminates the need for calculating the project's risk adjusted discount rate.
Last year, 1,000 cases of bottled water were sold at $5; this year, 1,200 cases were sold at $7 . These data could be explained by the
a. supply and demand curves shifting to the right. b. supply and demand curves shifting to the left. c. supply curve shifting to the left, with no change in demand. d. demand curve shifting to the right, with no change in supply.
One In the News article in the text titled "The Real March Madness: Ticket Prices " described how professional scalpers use the Internet to sell hard-to-get tickets to concerts and sporting events. When scalpers resell tickets at prices closer to equilibrium,
A. A market shortage is made larger, and the original sellers reap a profit. B. A market surplus is made smaller, and the scalpers reap a profit. C. A market shortage is made larger, and the scalpers reap a profit. D. A market shortage is made smaller, and the scalpers reap a profit.
What is liquidity? Why is money the most liquid of all assets? What is the cost of this liquidity?
What will be an ideal response?