When we hear on the news, "The Fed has increased interest rates today," the Fed has most likely
A) raised the required reserve ratio.
B) sold government bonds.
C) lowered the discount rate.
D) bought government bonds.
B
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Suppose you hear Professor I.M. Dismal say, "There is no substitute for carefully reading your textbook!" In the real world, students
A) will always and absolutely obey their professor's orders. B) will purchase the textbook regardless of its price. C) will often find what they believe are useful substitutes for reading the text. D) will have a vertical demand curve for textbooks.
World Wide Delivery Service Corporation develops a way to speed up its deliveries and reduce its costs. We would expect that this would
a. raise the demand for existing shares of the stock, causing the price to rise. b. decrease the demand for existing shares of the stock, causing the price to fall. c. raise the supply of the existing shares of stock, causing the price to rise. d. raise the supply of the existing shares of stock, causing the price to fall.
Which of the following is the best example of an "adverse selection" scenario (from a business perspective)?
A. An attorney engages in legally-risky tactics after discovering that a potential settlement is larger than was initially expected. B. An employee begins stealing from the company after being passed over for a promotion. C. A habitually reckless driver chooses not to buy auto insurance. D. A person who drinks and smokes heavily conceals this information before buying health insurance.
How can regional concentration of firms in an industry lead to external economies of scale? Give examples of these types of industrial clusters in the United States. Are they always beneficial?
What will be an ideal response?