Under what conditions is it most likely that a corporation will issue new stock as a form of finance?
a. when the interest rate is rising
b. when the interest rate is falling
c. when the firm's stock prices is falling
d. when bond prices are very high
a
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If a 20 percent decrease in the price of a good leads to a 15 percent increase in the quantity demanded, then demand is ________ and total revenue will ________ as a result of the fall in price
A) elastic; increase B) elastic; decrease C) inelastic; increase D) inelastic; decrease
Two isoquants, which represent different output levels but are derived from the same production function, cannot cross because
A) isoquants represent different utility levels B) this would violate a technical efficiency condition C) isoquants are downward sloping D) additional inputs will not be used by profit maximizing firms if those inputs decrease output E) Both B and D are true.
In the wage-setting relation, the nominal wage tends to decrease when
A) the price level increases. B) the unemployment rate decreases. C) unemployment benefits decrease. D) the minimum wage increases. E) all of the above
Which of the following will NOT shift the aggregate demand curve?
A. a change in tax rates B. a change in the amount of money in circulation C. a change in the price level D. a change in real interest rates