One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing preference by U.S. consumers for products made in the United States. Assuming that managers at these companies used all
available information, including the increased preference by U.S. consumers for domestically produced, when making the decision to move production back to the United States exemplifies which key economic idea?
A) People are rational.
B) People respond to economic incentives.
C) Optimal decisions are made at the margin.
D) The market system relies on the principle of voluntary exchange.
Answer: A
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FDICIA ________ incentives for banks to hold capital and ________ incentives to take on excessive risk
A) increased; decreased B) increased; increased C) decreased; decreased D) decreased; increased
Since 1802, the average annual compound return for stock holdings, adjusted for inflation, has been approximately
a. 2 percent. b. 7 percent. c. 15 percent. d. 30 percent.