An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held
a. (1 + r)n
b. (1 + n)r
c. 1/(1 + r)n
d. 1/(1 + n)r
C
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Colleges offer tuition scholarships even when they are running budget deficits because colleges
A) are public service institutions. B) can often earn additional net income by offering tuition scholarships. C) hope to receive contributions later from the recipients of scholarships. D) set tuition levels and establish scholarship policies without considering the monetary advantages.
Which of the following shocks have been emphasized most often with respect to real business cycle theory?
a. Shocks to technology b. Variations in environmental conditions c. Changes in the real (relative) prices of imported raw materials d. Changes in tax rates e. None of the above
If households' income taxes are cut, how are households likely to respond?
a. A decrease in consumption expenditure b. A decrease in saving c. Push the economy into recession d. An increase in consumption expenditure
"Regulatory capture" refers to the situation where a government agency charged with supervising and regulating a particular industry is:
A. Strongly influenced by the firms in that industry B. Headed by bureaucrats who have a "lock" on their positions, without any rivals C. Completely dominating the actions of firms in the industry D. Headed by unelected government officials