Which of the following is a final good or service?
A. Wood pulp purchased by a paper company
B. A box of brownies purchased by your instructor
C. A computer chip purchased by Banana Computers
D. Potatoes purchased by a potato chip company
Answer: B. A box of brownies purchased by your instructor
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The purchasing power of money
A) rises when prices fall. B) rises when prices rise. C) is set by the Fed in January of each year. D) is constant.
The total cost of federal regulation includes
A) the funding of government agencies overseeing compliance, the compliance cost for the regulated firms, and the opportunity cost of regulation for the firms. B) the funding of government agencies overseeing compliance less the compliance cost for the regulated firms and the opportunity cost of regulation for the firms. C) only the cost of compliance by the regulated firms. D) only the funding of the regulatory agencies.
International trade under a floating exchange rate system
A. has been trouble-free owing to the stabilizing role of speculators in the currency markets. B. has suffered from so many problems that the volume of trade has declined significantly. C. exposes businesses to unavoidable risks when exchange rates change. D. has been subject to wild runs on currencies that were on the verge of devaluation.
The link between corporate profits and investment
a) results from heavy reliance on internal financing b) indicates that cash flow is probably the key variable driving investment c) is the strongest empirical evidence of Tobin’s q d) explains the persistent drop in investment that occurred throughout the 1990s e) helps to keep investment fairly stable and countercyclical