Why does the NPV of a college education tend to be positive but relatively small?
A) College students tend to be young and poor, so their opportunity cost of capital is high.
B) College graduates typically have limited on-the-job skills, so their initial returns from the education investment tend to be small.
C) There are few barriers to entry for a college education.
D) Most of these studies are based on nominal interest rates, so the NPV is smaller than we would achieve under real interest rates.
C
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If the expenditure multiplier is 3.5 and investment spending increases by $2,000 billion, what will be the change in GDP?
a. $2,000 billion b. $5,000 billion c. $571.4 billion d. $3,500 billion e. $7,000 billion
Which of the following is one way the Federal Reserve Bank serves the government?
(A) Financing state government projects. (B) Making loans to the government. (C) Minting coins for the government. (D) Selling government securities.
A person has a comparative advantage in producing a good if that person:
a. can produce the good at a lower absolute cost than anyone else. b. can produce the good at a lower opportunity cost than anyone else. c. can do a better job than anyone else. d. spends more money in out-of-pocket expenses than anyone else. e. can produce the good at a higher opportunity cost than anyone else.
What do individuals have a strong incentive to do when price is the rationing criterion?
What will be an ideal response?