If your grandmother gives you $5,000, and you don't spend it, but invest it to earn 8% per year compounded annually, it will be worth $10,000 at the end of
A. 9 years.
B. 72 years.
C. 10 years.
D. 8 years.
Answer: A
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A theory asserts that manufacturers are less willing to sell units of output as the price of a good decreases, ceteris paribus. However, as the price of computers fell throughout the 1990s, more computers were sold. Which of the following best explains the apparent conflict between theory and data? a. The theory must be invalid
b. The theory rests on assumptions that are too simplistic. c. It is likely that variables other than the price and quantity of computers sold were changing. d. All variables other than the price and quantity of computers sold were unchanged.
The time inconsistency of monetary policy means that
a. once people have formed expectations of low inflation based on a promise by the central bank, the central bank is tempted to raise inflation to lower unemployment. b. at some times central banks think it is more important to keep unemployment low; at other times, they think it is more important to keep inflation low. c. monetary policy is not consistent across time because it is influenced by politics. d. monetary policy is not consistent across time because policymakers are incompetent.
What is the best explanation for the slope of the Keynesian zone of the aggregate supply curve?
A. an increase in aggregate demand causes both real output and the price level to increase. B. an increase in aggregate demand when the economy is operating below potential output causes real output to grow, with little or no effect on the price level. C. an increase in aggregate demand when the economy is operating at potential output causes the price level to rise, with little or no effect on real output.
The exchange rate between the U.S. dollar and the Japanese yen change
A. every five years. B. on a yearly basis. C. on a monthly basis. D. at times from one minute to the next.