The difference in present value between a perpetuity that promised $1 per year starting today and one that promised $1 per year starting next year is
a. 0.
b. $1.
c. $1/(1 + r).
d. $r/(1 + r).
b
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The short-run aggregate supply curve
A) is vertical. B) shows the impact changes in the price level have on the quantity of real GDP when resource prices are constant. C) illustrates the level of potential real GDP. D) shifts whenever the price level changes.
Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above
As a result of an increase in the government budget deficit, the ________ for loanable funds will ________, thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds. A) supply; rise; decreasing; increasing B) demand; fall; decreasing; decreasing C) demand; rise; increasing; decreasing D) supply; fall; increasing; decreasing
If the market price is $5 and a perfectly competitive firm is producing 1,200 units and the marginal cost to produce the 1,200th unit is $4.53, which of the following is true?
A) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is positive. B) The firm is maximizing profit. C) The firm should decrease production to maximize profit. D) The difference between marginal revenue and marginal cost (MR - MC) for the 1,200th unit is negative.
An example of physical capital is a:
A. plow. B. bank loan. C. seeds. D. tree.