Explain which of the following items are not capital goods:
What will be an ideal response?
• An auto assembly line
An auto assembly line is a capital good.
• A shopping mall
A shopping mall is a capital good.
• A golf ball
A golf ball is not a capital good. It is a consumption good.
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The above figures show the market for oranges. Which figure(s) shows the effect of a new government program that provides each public school child with an orange to start the day?
A) Figure A B) Figure D C) Figures A and C D) Figures A and D
When the Federal Reserve sells a government security to a commercial bank
A) the cash reserves of the commercial bank decrease. B) the net worth of the commercial bank increases. C) the loans of the commercial bank will increase. D) the balance sheet of the commercial bank is thrown off balance.