A manufacturing firm takes out a $500,000 loan to expand its plant. The loan has an annual interest rate of 7 percent. What would be the total compounded interest on the loan at the end of five years, excluding the principal?
A. $175,000
B. $35,075
C. $150,750
D. $201,275
D. $201,275
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Suppose that firms find that their inventories are less than planned. In this case, what is the initial relationship between aggregate planned expenditure and real GDP? Using the aggregate expenditure model, what adjustments, if any, take place?
What will be an ideal response?
With respect to production, the short run is best defined as a time period
A) lasting about six months. B) lasting about two years. C) in which all inputs are fixed. D) in which at least one input is fixed.
Which statement is true?
A. The Federal Reserve has an excellent record as a "lender of last resort." B. There is little debate about whether or not the Federal Reserve Board should be independent. C. The power of the Federal Reserve is centered largely in its Board of Governors. D. The stockholders in the Federal Reserve receive large profits.