When the rate of interest is 10 percent, the present value of $100 payable in two years is approximately
A) $80.
B) $83.
C) $100.
D) $110.
B
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Marginal revenue is equal to:
A) the change in price divided by the change in output. B) the change in quantity divided by the change in price. C) the change in P x Q due to a one unit change in output. D) price, but only if the firm is a price searcher.
Which of the following is true?
a. Uncertainty accompanies investment decisions. b. At any given time, there are a virtually infinite number of potential investment projects that might be undertaken by investors. c. In order to be successful, entrepreneurs must be good at recognizing and undertaking economically beneficial projects. d. All of the above are correct.
Suppose that gasoline prices increase dramatically this month. Lola commutes 100 miles to work each weekday. Over the next few months, Lola drives less on the weekends to try to save money. Within the year, she sells her home and purchases one only 10 miles from her place of employment. These examples illustrate the importance of
a. the availability of substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.
If workers and firms have rational expectations, they form their expectations using
A) all the information available to them. B) only information from the past. C) only information provided to them by the government. D) only information gathered from random sources.