The present value of a future amount of money will be greater the:
A. greater the interest rate.
B. less the amount of time before the future payment is received.
C. more the amount of time before the future payment is received.
D. greater the rate of expected rate of inflation.
B. less the amount of time before the future payment is received.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Economists use the term externalities to refer to
A) consequences people ignore in their decision making. B) any cost associated with an action. C) foreign imports or exports. D) the behavior in which people actually engage as distinct from their alleged reasons for acting as they do. E) the outside directors of a corporation as distinct from corporate directors who are also managers.
Free riders are not a problem in the market for a private good because
A) non-payers can be excluded from consuming the good. B) the good is a rival good. C) the good can be produced only at a positive marginal cost. D) the free rider will not get caught.
Which of the following statements best describes the study of economics?
A. Economics studies how people maximize returns in the stock market. B. Economics studies how the Federal Reserve handles fluctuation in business cycles. C. Economics studies how governments determine appropriate tax rates. D. Economics studies how individuals and groups manage scarce resources.