Business investment is most similar to what form of consumer expenditures and why?
A) consumer nondurables since they are "used up" in producing consumer welfare
B) consumer durables since they accelerate consume welfare
C) consumer durables since they may be treated as a form of household saving
D) Both A and B are correct.
C
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Suppose a new law imposes a tax on all trades of bonds and stock. What is the likely effect on money demand?
A) Money demand declines first, then rises when inflation increases. B) Money demand rises. C) The overall effect is ambiguous. D) Money demand declines.
An individual has an absolute advantage in producing pizzas if that individual:
A. has a higher opportunity cost of producing pizzas than anyone else. B. has a lower opportunity cost of producing pizzas than anyone else. C. charges the lowest price for pizzas. D. can produce more pizzas in a given amount of time than anyone else.