If the real interest rate in the economy is i and the expected rate of return from additional investment is r, then more investment will be forthcoming when:
A. r falls.
B. i is greater than r.
C. r is greater than i.
D. i rises.
C. r is greater than i.
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MNO Limited publishes a magazine targeted at urban professionals who live on the east and west coasts of the U.S., and all of the magazines are printed at a marginal cost of $0.50 per copy at a publishing plant in Kansas
If the East Coast elasticity of demand for the magazine is -1.25 and the West Coast elasticity of demand is -1.50, what prices should MNO Limited charge for the magazines in these two markets in order to maximize profits? A) Price should be $0.50 in both markets B) Price should be $2.50 on the West Coast and $1.50 on the East Coast C) Price should be $1.50 on the West Coast and $2.50 on the East Coast D) Price should be $0.40 on the West Coast and $0.33 on the East Coast
If the interest rate rises, the present value of property rises because the return is now higher
Indicate whether the statement is true or false
Suppose that monetary neutrality holds. Of the following variables, which ones do not change when the money supply increases?
a. real interest rates b. inflation c. the price level d. real output e. real wages f. nominal wages
What is the present value of a payment of $100 to be made one year from today?
a. $100(1 + r) b. $100/(1 + r) c. $100 - $100 r d. $100 - (1 + r)/$100