The present value of a given payment will be lower
a. if the payment comes sooner than expected
b. the lower the prevailing interest rate
c. the further in the future the payment is to be received
d. the sooner the payment is to be received
e. if the payment is made in cash
C
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Any value of the money supply chosen by the Federal Reserve implies a specific value for ________.
A. government purchases B. potential output C. the budget deficit D. the nominal interest rate
Sara's income is $500, the price of X is $6, and the price of Y is $4. Based on these prices and income, Sara buys 120 units of X and 70 units of Y. Call this combination of X and Y "bundle K." At bundle K, Sara's marginal rate of substitution is 2. Given these prices and income, what is Sara's equilibrium consumption of X? Briefly explain your reasoning.
What will be an ideal response?
If DI falls by $100 billion, and C falls by $90 billion, the slope of the consumption is
A. ?0.45. B. 0.45. C. ?0.90. D. 0.90. E. 0.50.
Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also
offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? A) He would lose some but not all his customers. B) Initially, his customers might complain but over time they will come to accept the new rate. C) If Jason raises his price, he would lose all his customers. D) If Jason raises his price, then all others supplying the same service will also raise their prices.