The process of accumulation that occurs when interest is paid on previously earned interest is called:
A. backdating.
B. compounding.
C. present valuation.
D. front loading.
Answer: B
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The MU/P equalization principle means consumers will exhaust their expenditure budget so that, in the end, the MU/P ratio is:
a. zero for each good. b. higher for goods the consumer wants the most. c. maximized for the goods the consumer wants the most. d. higher than TU/P. e. the same for each good.
The dominant school of economic thought until midway through the Great Depression of the 1930s was:
a. classical. b. Keynesian. c. monetarism. d. supply-side. e. rational expectations.
Which statement is true?
A. This firm is in the short run.
B. This firm is in the long run.
C. This firm may be in either the short run or the long run.
D. It cannot be determined if this firm is in the short run or the long run.
Production Possibility Schedules for Two South Pacific Island NationsKiribatiTuvaluMangoesCoconutsMangoesCoconuts30001,20002004008001,2001008004002,40001,20003,600Which of the following statements is true?
A. Only Kiribati will benefit from trade with Tuvalu. B. No gains from trade are possible for either Kiribati or Tuvalu. C. Only Tuvalu will benefit from trade with Kiribati. D. Gains from trade are possible for both countries.