Each firm has a downward-sloping demand curve for loanable funds because its
a. marginal resource cost curve slopes downward
b. marginal revenue product curve slopes upward
c. marginal rate of return on investment curve slopes downward
d. marginal resource cost slopes upward
e. marginal rate of return on investment curve slopes upward
C
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In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed
A) sold $250 in government bonds. B) sold $100 in government bonds. C) sold $50 in government bonds. D) purchased $100 in government bonds.
Which situation is most likely to exhibit diminishing marginal returns to labor?
A) a factory that obtains a new machine for every new worker hired B) a factory that hires more workers and never increases the amount of machinery C) a factory that increases the amount of machinery and holds the number of worker constant D) None of these situations will result in diminishing marginal returns to labor.