When the Fed wants to lower the federal funds rate, it ________.
A. increases the reserve requirement
B. increases the prime rate
C. buys bonds from banks and the public
D. increases the discount rate
Answer: C
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“Plowback” is a preferred source of financing a corporation because
A. the funds are easier to obtain, compared to issuing stocks. B. it is not subject to double taxation. C. selling bonds involves the high cost of money. D. stock markets are subject to random walks.
In perfect competition, as the long run approaches, economic losses will cause
a. the exit of existing firms, shifting the market supply curve to the left b. government regulation c. technological innovation d. inflation e. a favorable shift in tastes and preferences
Because industrial countries depend upon the less developed countries for their food and raw materials, the less-developed countries account for the majority of world trade
Indicate whether the statement is true or false
Suppose there are three power-generating plants, each of which has access to 5 different production processes. The table below summarizes the cost of each production process and the corresponding number of tons of smoke emitted each.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Firm X ($/day)$500$514$530$555$585Cost to Firm Y ($/day)$400$420$445$480$520Cost to Firm Z ($/day)$300$325$360$400$550 Suppose the government imposes a tax of $21 on each ton of smoke emitted. To minimize costs, Firm X will emit ________ tons; Firm Y will emit ________ tons, and Firm Z will emit ________ tons.
A. 2; 3; 4 B. 3; 4; 4 C. 1; 2; 3 D. 1; 2; 4