If one were to consider a university as a business, the computers in the computer labs would be regarded by economists as
a. technology flows.
b. mechanization flows.
c. part of the university's stock of capital.
d. a flow of services from the university's stock of capital.
c
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Suppose that you find out from an L.L. Bean catalogue that a sweater costs $30.00. In this case, money is serving as a
A) medium of exchange. B) unit of account. C) store of value. D) double coincidence of want.
High net worth helps to diminish the problem of moral hazard problem by
A) requiring the state to verify the debt contract. B) collateralizing the debt contract. C) making the debt contract incentive compatible. D) giving the debt contract characteristics of equity contracts.
Along an IS curve as income levels __________, saving is larger, so the interest rate must be __________ to expand the level of investment so it will be equal to saving
A) increase; higher B) increase; lower C) decrease; higher D) decrease; lower
Consider someone who borrows $10,000 to buy a car at a fixed interest rate of 9%. If inflation is 3% at the time the loan is made, what is the real interest rate at which the loan must be repaid, and to what level would the interest rate have to rise for the real interest rate on the loan to be zero?
a. 4.5%; 7.5% b. 6; 9% c. 8%; 10% d. 6; 12%