ArCh30_10e.doc - Chapter 30—Interest, Rent, and Profit...

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Chapter 30—Interest, Rent, and ProfitMULTIPLE CHOICE1.The two ways in which the word "interest" is used in economics are as the price fora.loanable funds and the return earned by entrepreneurship.b.loanable funds and the return earned by capital as an input in the production process.c.money and the return for risk taking.d.loanable funds and the return for risk taking.ANS: BPTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities2.Interest can be regardedas thePTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities3.Is there a difference between the termsinterestandinterest rate?.PTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities4.Suppose you borrow $1,000 today with the promise to pay back $1,060 one year from today. Then theinterest rate is __________, and the interest is __________.PTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities5.The nominal interest rate is determineda.by the Federal Reserve system.b.in the loanable funds market.c.by the U.S. Treasury.d.by the average rate of change in the price of capital goods.ANS: BPTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities905
6.The demand for loanable funds comes fromPTS:1DIF:ModerateNAT:Analytic
LOC:Markets, market failure, and externalities

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