The smaller the fraction of an investment financed by borrowing
A) the greater the potential return and the smaller the potential loss on that investment.
B) the greater the potential return and potential loss on that investment.
C) the smaller the potential return and potential loss on that investment.
D) the smaller the potential return and the greater the potential loss on that investment.
C
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Say that Alland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Georgeland can produce 24 units of food per year or 12 units of clothing. Which of the following is true?
a. Alland has both a comparative and absolute advantage in producing food. b. Alland has comparative advantage, but not an absolute advantage, in producing food. c. Georgeland has both a comparative and absolute disadvantage in producing clothing. d. Georgeland has an absolute disadvantage, but not a comparative disadvantage, in producing clothing.
If the Midwest experiences a severe drought that damages the corn crops, we should expect the
a. supply of corn will decrease and the price of corn will rise. b. demand curve for corn will decrease and the price of corn will fall. c. demand curve for corn will increase and the price of corn will rise. d. supply of corn will increase and the price of corn will fall.