A borrower who has to pay an interest rate of 8% rather than 6% due to risk spread will pay:
A. $20 more in interest annually for every $100 borrowed.
B. 2% in net interest.
C. less interest in total over the life of the loan.
D. 33.3% higher interest in dollar terms.
Answer: D
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What will be an ideal response?
Suppose Paris thinks a 5 percent increase in her hourly wage as an incentive to work more hours while the price level also increases by 5 percent. Paris is said to be suffering from
A) money illusion. B) rationality. C) irrationality. D) the effects of competition.
When the average total cost is at its minimum, it is:
a. equal to average variable cost. b. greater than marginal cost. c. equal to average fixed cost. d. equal to marginal cost. e. less than marginal cost.
In the 1700s, Reverend Thomas Malthus predicted that:
a. per capita economic growth would not change very much since humans were already content with their standards of living. b. per capita economic growth would tend to rise as modern birth control techniques caused the rate of population growth to decline. c. per capita economic growth would eventually become negative since population growth would tend to outstrip production. d. per capita economic growth would tend to rise in the future because technological advances in production would outpace population growth.