The Invention of Machinery That Can Double the Amount of Gold

question 8

Multiple Choice

The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to:

• A)raise the world price of gold to pay for the new machinery.
• B)lower the world price of gold because any given amount can now be produced more cheaply.
• C)raise the world price of gold because miners' wages must double as their productivity doubles.
• D)lower the world price of gold only if new mining companies are not allowed to enter the industry.

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Definitions:

Ordinary Gains

Profits resulting from the sale of assets used in a business's normal operations, subject to regular income tax rates.

Troubled Debt Restructuring

A process where terms of a debt are modified due to the debtor's financial difficulties, often involving a reduction in interest rate or principal owed.

Settlement

The process of resolving a transaction, including the transfer of funds and securities.

Non-interest-bearing Note

A promissory note with no stated interest rate, where the interest is typically implied and calculated based on the difference between the face value and the cash received.