XYZ Gadget Company is currently considering which investment projects it should undertake. The following list of projects along with the estimated rate of return of each project is presented to the executive management team:Project A (8.5%)Project B (7%)Project C (6%)Project D (11%)Project E (5.5%)The current interest rate in the loanable funds market is 5%. However, if an increase in government borrowing pushes the interest rate to 7.5%, we would expect the company to discontinue investment plans for all but ________ of its planned projects.
A. two
B. three
C. four
D. one
Answer: A
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A government spending and taxation policy to achieve macroeconomic goals is known as:
a. countercyclical policy. b. fiscal policy. c. monetary policy. d. a balanced budget. e. presidential discretion.
Which of the following was true with regard to the Great Depression?
a. The policies of the New Deal brought the Great Depression to an end well before World War II. b. Sound economic policy was followed during this era, which makes the length and severity of the Great Depression puzzling to economists. c. The length and severity of the Great Depression was the result of unsound economic policies followed by both the Hoover and Roosevelt Administrations. d. The Great Depression was largely the result of the highly expansionary monetary policy of the Fed during the 1930s.
In the IS-LM model when M/P rises, in short-run equilibrium, in the usual case, the interest rate ______ and output ______.
Fill in the blank(s) with the appropriate word(s).
Under the VAR assumptions, the OLS estimators are
A) consistent and have a joint normal distribution even in small samples. B) BLUE. C) consistent and have a joint normal distribution in large samples. D) unbiased.