Roger has the opportunity to invest $100,000 in two different assets. The investment in Asset #1 will have a present value of $120,000. The investment in Asset #2 is expected to have a future value of $140,000 in four years. If the market interest rate is 5 percent a year, which one would be the better investment?
A. Asset #2, because its future value is greater than the present value of Asset #1
B. Asset #1, because its present value is greater than the future value of Asset #2
C. Asset #2, because its present value is greater than the present value of Asset #1
D. Asset #1, because its present value is greater than the present value of Asset #2
D. Asset #1, because its present value is greater than the present value of Asset #2
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Which of the following is among the possible reasons that the 2007-2009 financial crisis did not result in an economic depression?
A) the declaration of a bank holiday by the nation's President B) international policy coordination C) strict reliance on conventional monetary policy D) government spending restraint
In a perfectly competitive labor market, the labor supply curve facing the firm will be
A) upward sloping. B) downward sloping. C) horizontal. D) vertical.
Using the expenditure method to estimate GDP, we would include:
A. consumption, investment, government purchases, and net exports. B. consumption, government revenues, durable goods, and net exports. C. consumption, investment, government purchases, and exports. D. consumption, investment, government purchases, and imports.
The combined effect on the loanable funds market of a new technology that increases the marginal physical product of capital and a shift in consumers' expectation of future prices, now expecting they will be lower than they earlier expected, is a(n)
a. increase in the interest rate b. decrease in the interest rate c. decrease in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change d. increase in the quantity demanded and quantity supplied of loanable funds but unclear in what direction the interest rate will change e. shift in the demand curve to the left and the supply curve of loanable funds to the right