Bank C promises to pay a compound annual interest rate of 6 percent, while Bank S pays an 8 percent simple annual interest rate on deposits. If you deposit $1,000 in each bank, after 10 years, your deposit in Bank C equals ________, while your deposit in Bank S equals ________.
A. $1,600; $2,159
B. $1,060; $1,800
C. $1,600; $1,800
D. $1,791; $1,800
Answer: D
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If future price changes were perfectly anticipated by both borrowers and lenders, then _____
a. the expected real interest rate would be higher than the actual rate b. the expected real interest rate would lower than the actual rate c. the real interest rate in the future would decrease by the amount of the price increase d. the real interest rate in the future would increase by the amount of the price increase e. the real interest rate in the future would remain unchanged
Which of the following actions did Congress take in the 1930s, in an effort to prevent future financial crises like the stock market crash of 1929?
A. Glass-Steagall Banking Act B. Bubble Act C. Hastings Banking Act D. Formation of the CBO (Congressional Budget Office)
Organizations that survive over time
A) will never change in the future. B) are efficient. C) will be forced to become horizontal. D) are inefficient.
The structural deficit can be defined as
a. the deficit that is structurally obstructing economic recovery to reach level of high employment. b. a hypothetical construct that estimates the deficit, given current tax rates and expenditure policies, if the economy were operating at some fixed high-employment level. c. the deficit necessary to restructure the economy and reach a desired high-employment level. d. the deficit that would prevail if fiscal policy were structured differently in order to reach a desired high-employment level.