ABC Corp. is considering an investment project that costs $500 today. It expects the project will yield income of $200 at the end of years 1, 2, and 3. The interest rate must be ________ for the firm to undertake the project.
A. exactly equal to 10%
B. at least 11%
C. no more than 9%
D. It is indeterminate from the given information.
Answer: C
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The oil shock of 2007-2008 saw the price of oil rising from less than $60 a barrel in March 2007 to over $145 a barrel in July 2008, and decreasing again to just over $30 a barrel in December 2008
Assuming the economy was at potential GDP prior to the oil shock, the increase in the price of oil, such as what occurred between March 2007 and July 2008, acts as a negative supply shock, causing the inflation rate to ________ and the output gap to ________. A) increase; become negative B) increase; become positive C) decrease; become negative D) decrease; become positive
Mercantilism followed feudalism. Unlike feudalism, mercantilism did not support any form of a strong central government or system of nation states
Indicate whether the statement is true or false
If the Fed sells bonds, the short run impact of this policy will tend to include: a. an increase in the inflation rate. b. a reduction in unemployment
c. an increase in real output. d. an increase in real interest rates.
Mary Jo Smith is willing to work for $3,200 per month. She asks the HR manager at Plain Truth Advertising for $4,000 per month. He was willing to pay only $3,700 per month, so he rejects her application and begins to search for a new employee again. This is an example of
A. agency problem. B. bargaining failure. C. value maximization. D. adverse selection.