Interest foregone on financial capital invested in a firm represents an economic cost
a. only if the firm borrows to finance capital investments.
b. only when the funds are used to buy machinery.
c. because funds invested in the firm could be earning interest elsewhere.
d. because accountants have traditionally input an interest cost for this item.
C
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Which of the following terms describes how a good is produced in stages?
a. supply chain b. value chain c. supply trade d. value trade
Under the expectations hypothesis of the term structure of interest rates, explain the impact of a U.S. Treasury decision to phase out the 30-year bond and to only focus on 3-month, 1-year, 5-year and 10-year bonds?
What will be an ideal response?
In the short run:
A. all factors of production are fixed. B. all factors of production are variable. C. some factors of production are variable, while at least one factor of production is fixed. D. None of these are correct.
If the value of the cross elasticity of demand is negative, the two goods are
A) complementary goods. B) substitute goods. C) normal goods. D) inferior goods.