The nominal rate of interest is 8.5 percent and the real rate is 5 percent. The expected rate of return on an investment is 8 percent. The firm should:
A. Not undertake the investment because the expected rate of return of 8 percent is less than
the nominal interest rate
B. Not undertake the investment because the expected rate of return of 8 percent is less than
the nominal plus the real interest rate
C. Undertake the investment because the expected rate of return of 8 percent is greater than
the difference between the nominal and real interest rates
D. Undertake the investment because the expected rate of return of 8 percent is greater than
the real rate of interest
D. Undertake the investment because the expected rate of return of 8 percent is greater than
the real rate of interest
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Which of the following is TRUE of unemployment?
A) It is defined as the number of people actively looking for work who do not have jobs. B) The result is that the economy operates inside its production possibilities curve. C) There are psychological consequences associated with unemployment. D) All of the above.
A physicians' professional association supports legislation seeking higher quality medical care. According to the special interest theory of regulation, who likely will benefit most from this legislation?
a. Government, through decreased regulation of physician quality. b. Patients, through reduced prices for medical care. c. Physicians, through increased prices for medical care. d. Hospitals, through decreased for physicians' services. e. Government, since higher quality health care is clearly in the public interest.
What are the reasons that are usually given to justify regulation?
Which of the following is an example of an investment in human capital?
A. A chemical firm supports research to develop new chemicals. B. A firm pays for workers to take college classes. C. A firm replaces manually controlled production with a computer controlled procedure. D. A firm purchases new equipment for a manufacturing process.