In finance, leverage:
A. helps explain why a crash is so damaging after a bubble bursts.
B. is using borrowed money to pay for investments.
C. multiplies the effect of gains and losses in financial markets.
D. All of these statements are true.
Answer: D
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Capital, as a factor of production, refers to
A) the tools and instruments used to produce other goods and services. B) stocks and bonds, but not money. C) money, stocks, and bonds. D) the production technology used by firms. E) the production factors imported from abroad.
Assume that when $100 of new reserves enter the banking system, the money supply ultimately increases by $625 . Assume also that no banks hold excess reserves and that the entire money supply consists of bank deposits. If, at a point in time, reserves for all banks amount to $500, then at that same point in time, loans for all banks amount to $2,625
a. True b. False Indicate whether the statement is true or false
Why is the tax cut multiplier different from the purchases multiplier?
What will be an ideal response?
Refer to the following table. If Jane's hourly wage rose from $2 per hour to $4 an hour and Jane had 6 hours to work or play, Jane would:SpendingTotal Utility of spending($)Hours of leisureTotal utility of leisure$260130$4110254$6148370$8172478$10180578$12186670
A. work 4 hours and play 2 hours when her wage is $2/hour but then work 3 hours and play 3 hours when her wage is $4 an hour. B. not work at $2 an hour and not play at $6 an hour. C. not play at either wage. D. work 4 hours and play 2 hours when her wage is $2/hour but then work 6 hours when her wage is $4 an hour.