Assume a firm is run as a zero-profit enterprise. Which of the following would be TRUE?
A) There is a higher probability that wage reductions would outweigh layoffs.
B) Those in charge would not act any different than regular owners, there would still be layoffs.
C) Those not in charge would remain risk neutral.
D) Wage reductions would be lower than they would be if the firm was run for profit.
A
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A reduction in the price charged for luncheon specials by a downtown cafeteria will
A) affect the demand (curve) for that cafeteria's luncheons if its competitors react. B) have no effect on the demand for lunch at other downtown restaurants. C) increase the cafeteria's gross revenue from lunch business. D) increase the cafeteria's net revenue from lunch business if the demand is elastic. E) increase the cafeteria's net revenue from lunch business if the demand is inelastic.
In the case where interest rates are higher in Canada, which of the following is an example of a "carry trade"
a. Increase borrowing in the US, convert to Canadian dollars and invest in Canada b. Increase borrowing in the US and invest in the US c. Increase borrowing in Canada, convert to dollars and invest in the US d. Increase borrowing in Canada and invest in Canada