Suppose someone offered to give you $1,000,000 five years in the future and the anticipated interest rate is 5 percent. The present value of this offer would be worth approximately
A. $500,000.
B. $286,000.
C. $784,000.
D. $1,050,000.
Answer: C
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Assuming a closed economy (i.e., NX = O) the data in Figure 2-1 suggest that for each year after 1980
A) private saving could have been either positive or negative. B) private saving was negative. C) private saving was positive. D) private saving equaled zero.
Which of the following is true?
a. In a competitive capital market, private investors have a strong incentive to evaluate projects carefully and allocate their funds toward those projects expected to yield the highest rates of return. b. In a competitive environment, profitable investment projects will tend to increase the wealth of the nation. c. When investment funds are allocated by governments (rather than capital markets), political clout rather than the expected rate of return will generally determine which projects are undertaken. d. All of the above are correct.
If workers received a 5 percent wage increase and the rate of inflation was 10 percent, then their real wage:
A. decreased. B. remained constant. C. increased. D. equaled the nominal wage.
Fiscal policy can be implemented more quickly than monetary policy
Indicate whether the statement is true or false