When an individual obtains a car loan and makes all of the regular monthly payments, the sum of the payments made will exceed the purchase price of the car. This is due primarily to the core principle:
A. time has value.
B. information is the basis for decisions.
C. markets determine prices and allocate resources.
D. risk requires compensation.
Answer: A
You might also like to view...
An increase in the price level, other things equal, will shift the ________.
A. consumption and net exports schedules of the aggregate expenditures model upward, but the investment schedule downward B. consumption, investment, and net exports schedules of the aggregate expenditures model upward C. consumption, investment, and net exports schedules of the aggregate expenditures model downward D. consumption and investment schedules of the aggregate expenditures model upward, but the net exports schedule downward
The median voter model implies that
A) people in the political middle will be dissatisfied with the amount of spending on government funded projects. B) spending on government funded projects reflects the preferences of only those far away from the median. C) many people will be satisfied with the amount of spending on government funded projects. D) many people will be dissatisfied with the amount of spending on government funded projects.
The ____ method assumes that the cash flows over the life of the project are reinvested at the ____
a. net present value; computed internal rate of return b. internal rate of return; firm's cost of capital c. net present value; firm's cost of capital d. net present value; risk-free rate of return e. none of the above
Which of the following types of unemployment is likely to exist in an economy that is at its potential output level?
a. Cyclical unemployment only b. Structural unemployment only c. Frictional, cyclical, and seasonal unemployment only d. Frictional, seasonal, and structural unemployment only e. Seasonal unemployment only