Firms and Businesses Hold Some of Their Assets in the Form

question 287

Multiple Choice

Firms and businesses hold some of their assets in the form of money because:

• A)it allows them to make purchases directly.
• B)it is a form of M2.
• C)bonds are more liquid.
• D)interest rates on money tend to be lower than other types of assets.

Analyze factors influencing individual labor supply curves and the impact of changes in wages.

Understand the factor distribution of income and how it reflects on labor and capital.

Distinguish between factors of production and inputs and their roles in economics.

Describe the firm's decision-making process in hiring based on the marginal product of labor.

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Definitions:

Prices

The monetary value assigned to goods and services, determined by factors like supply and demand.

Income Increase

A rise in the amount of money earned by an individual or generated by a business, often resulting from wages, investments, or sales.

Income Falls

A decline in the amount of money earned by individuals or households, often measured over a specific period.

Budget Line

A graphic representation of all possible combinations of two goods that a consumer can afford with their income at given prices.