What is the present value of $10,000 to be received after one year, if the current annual rate of interest is 6%?
A) $8,644.26
B) $8,922.34
C) $9,433.96
D) $10,000
C
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In the short run a perfectly competitive firm will
A) never shut down. B) shut down if P < ATC. C) shut down if P < AVC. D) shut down if P > AFC.
John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000, and there is a 25 percent chance that he could lose it all. If an insurance company offers to insure against this loss for $6,000, John will
A) buy the policy. B) not buy the policy. C) be indifferent between being insured and uninsured. D) There is not enough information to answer.
The supply curve of a natural resource like oil has a positive slope because
A. the supply becomes closer to exhaustion as demand rises. B. it becomes more costly to find and develop supplies as demand rises. C. rents rise as output increases. D. indirect taxes rise with output.
Assume monetary equilibrium exists; that is, the desired and actual supply of money are equal. Also assume that nominal GDP equals $960 billion and the money supply is $160 billion. From a strict monetarist view, an increase in the money supply by $12 billion will increase nominal GDP by:
A. $13 billion B. $24 billion C. $72 billion D. $80 billion