Suppose a manager is deciding whether or not to purchase a piece of equipment to make an input internally and has completed the majority of the net present value (NPV) calculations. The manager has correctly calculated the NPV to be equal to: NPV = ($1.023 × Q) - $350,000, where Q is the annual quantity of the input the firm needs. If the firm needs 355,000 units of the input each year, the
manager ________ buy the equipment because the NPV is ________.
A) should not; negative
B) should; negative
C) should not; positive
D) should; positive
D) should; positive
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The Rule of 70 is used to
A) estimate how much of an economy's growth rate is due to increases in capital per hour of labor. B) calculate the standard of living. C) calculate the economy's growth rate. D) estimate how long it will take the level of any variable to double.
Government spending results from the provision of
a. private goods b. public goods c. merit goods d. redistribution e. all of the above
Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. Monetary base to fall. b. M2 money supply to fall. c. M2 money multiplier to fall. d. Monetary base to remain the same.
If aggregate expenditures are lower than real GDP:
A. actual real output is less than equilibrium real output. B. aggregate output increases. C. employment increases. D. there will be unplanned increases in inventories.