Which of the following is true of the present value of an investment?
a. The higher the rate of interest the higher will be the present value of an investment.
b. Present value of an investment is an increasing function of the time period of investment.
c. The longer the time period of investment the lower will be its present value.
d. Present value falls less than proportionately with the length of the delay in payment.
C
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In an open economy, as the price level increases, a(n) ____ in demand in the quantity of domestic goods results in a(n) ____ in the quantity of RGDP demanded
a. increase, decrease b. increase, increase c. decrease, decrease d. decrease, increase
If the CPI was 228 at the end of 2007 and 236 at the end of 2008, what was the inflation rate in 2008?
A) 236 percent B) 3.5 percent C) 8 percent D) 4 percent E) 3.4 percent
If the rate of interest increases, firms will most likely respond by
A. increasing investment. B. decreasing investment. C. not changing investment. D. increasing capital stock.
You are ill on the day of the concert for which you had bought tickets almost a month ago. Since you paid almost $40 for the tickets, you are considering whether to go to the concert anyway. Rational choice theory says that you should go to the concert only if:
A. the benefits of going outweigh the $40 dollars plus any additional pains associated with getting out of bed while being sick. B. the benefits of going outweigh the $40 dollars you spent on the tickets. C. the benefits of going outweigh any pains associated with getting out of bed while being sick. D. you feel better.