Answer the following statement true (T) or false (F)
1) Other things equal, the shorter the loan period and the larger the loan size, the higher is the
interest rate charged by the lender.
2) The supply of loanable funds is perfectly elastic.
3) Economic profits are the salaries received by the hired managers of business corporations.
4) The basic function of profits and losses is to allocate society's scarce resources to their
highest valued uses.
5) Broadly defined, labor's share of national income has been remarkably stable since 1900.
1) F
2) F
3) F
4) T
5) T
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Assuming all else equal, if the Fed is expected to adopt a contractionary monetary policy, ________
A) labor demand will increase B) inflation expectations will increase C) the long-run real interest rate will increase D) labor supply will increase
Refer to Table 9-9
a. Which country has an absolute advantage in the production of both light bulbs and flash drives? b. Which country has a comparative advantage in the production of light bulbs? c. Which country has a comparative advantage in the production of flash drives? Table 9-10 Pens Pencils Tran 40 160 Farah 50 150 Table 9-10 shows the output per week for pens and pencils by Tran and Farah.