Investment decisions are based on the trade-off between the:
A. potential profit that could be generated by investment and the cost of borrowing money to finance the investment.
B. interest rate that savers will earn and the interest rate that the borrowers will have to pay.
C. future value of the loan and the present value of the loan.
D. potential profit that could be generated and the willingness of a lender to make the loan.
A. potential profit that could be generated by investment and the cost of borrowing money to finance the investment.
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A firm that generates zero economic profit usually has
A) negative business profit. B) zero business profit. C) positive business profit. D) business profit equal to half the total revenue.
Economists disagree on whether labor taxes cause small or large deadweight losses. This disagreement arises primarily because economists hold different views about
a. the size of labor taxes. b. the importance of labor taxes imposed by the federal government relative to the importance of labor taxes imposed by the various states. c. the elasticity of labor supply. d. the elasticity of labor demand.