Which of the following is common to all investments?
A. The payment of interest.
B. Some price must be paid to acquire them.
C. Owners are guaranteed future payments.
D. Government insurance backs them.
B. Some price must be paid to acquire them.
You might also like to view...
The substitution effect of a change in the real interest rate is an example of
A) an intratemporal substitution effect. B) an intertemporal substitution effect. C) an atemporal substitution effect. D) a temporary substitution effect.
In the long run, a perfectly competitive firm will produce:
a. in the upward-sloping portion of its LRAC curve. b. where P = minimum AVC. c. in the downward-sloping portion of its LRAC curve. d. where P is greater than minimum ATC. e. where P = minimum ATC.
Which of the following is NOT a reason why an increase in the interest rate usually makes investment projects less attractive?
A. At a higher rate, future dollars are worth less compared to current dollars. B. A typical investment project incurs the majority of its costs early in its life. C. A typical investment project receives a disproportionate fraction of its revenue early in its life. D. At a higher rate, putting money into the bank is more attractive.
If the nominal interest rate is 6% and the inflation rate is 3%, the real interest rate is
a. 2% b. 3% c. 6% d. 9%