Which one of the following would count as investment in the GDP accounts?
A. Purchase of a new airplane by an airline.
B. Purchase of a U.S. government bond.
C. Purchase of 100 shares of Wal-Mart stock.
D. Purchase of an existing house.
Answer: A
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If Bill thinks tacos and turkey sandwiches are perfect substitutes, then his indifference curves for these two goods
A) are L-shaped. B) are negatively sloped and linear. C) are positively sloped and linear. D) have slopes equal to 1.
As a form of business, a sole proprietorship
A) cannot issue stock. B) has limited liability. C) has the most government rules and regulations affecting it. D) has more than one owner.
In today's world markets, poor developing countries tend to rely primarily on exports of
A) agricultural products. B) primary products. C) mineral products. D) manufactured products. E) high-tech products.
Analysis of adverse selection indicates that financial intermediaries, especially banks
A) have advantages in overcoming the free-rider problem, helping to explain why indirect finance is a more important source of business finance than is direct finance. B) despite their success in overcoming free-rider problems, nevertheless play a minor role in moving funds to corporations. C) provide better-known and larger corporations a higher percentage of their external funds than they do to newer and smaller corporations which rely to a greater extent on the new issues market for funds. D) must buy securities from corporations to diversify the risk that results from holding non-tradable loans.