The present value of a promise to pay $100 one year from now is approximately $90.91 if the interest rate is 10 percent
a. True
b. False
A
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Which of the following is an example of opportunity cost?
A. The income that could have been earned by working full-time instead of going to college. B. The decline in the grades of a student athlete that occurs because she decides to spend more time practicing sports than on her academic work. C. The value of other things you could have done with the same time and money it cost you to go to the movies. D. All of the choices are examples of opportunity cost.
Because most gas stations are small relative to the market in which they operate and gasoline is fairly homogeneous, the market for gasoline is considered to be perfectly competitive
Indicate whether the statement is true or false
In the foreign exchange market, a balance of payments deficit is represented by:
A) excess supply of dollars. B) excess demand for dollars. C) equilibrium in the foreign exchange market. D) none of the above.
Fluctuating interest rates tend to cause large changes in real output when the
A) IS curve is flat. B) IS curve is steep. C) LM curve is flat. D) LM curve is steep.