When a bank suspects that a $1 million loan might prove to be bad debt that will have to be written off in the future the bank
A) can set aside $1 million of its earnings in its loan loss reserves account.
B) reduces its reported earnings by $1, even though it has not yet actually lost the $1 million.
C) reduces its assets immediately by $1 million, even though it has not yet lost the $1 million.
D) reduces its reserves by $1 million, so that they can use those funds later.
A
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________ when its inventory increases
A) A firm's total product curve is likely to shift upward B) A firm's labor demand curve is likely to shift to the left C) A firm's cost curve is likely to shift downward D) A firm's labor demand curve is likely to shift to the right
In the Solow model, the faster growth of output that results from an increase in the saving rate is temporary, because ________
A) of diminishing marginal product of capital B) with a larger stock of capital, consumption is encouraged more than investment C) the rising capital stock depreciates at a faster rate D) the economy settles into a steady state in which saving no longer rises
Because private owners are held responsible for damages their property causes to the property of others, private owners have
a. a strong incentive to take steps to reduce the chance that they will harm the property of others. b. a strong incentive to use their property now rather than conserving it for the future. c. little incentive to take good care of the property. d. little incentive to consider the harm their property may do to the property of others.
The production function
A) gives the maximum amount of output for a given level of inputs. B) gives the implicit costs for all inputs. C) gives the amount of time necessary to reach the long run. D) allows us to compute the difference between accounting and economic profits.