The cost of capital is best described as the
A) opportunity cost of financing a capital outlay.
B) funds that must be acquired to finance a capital outlay.
C) decrease in stockholder equity due to a capital outlay.
D) All of the above
A
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Use the following table with data for a private open economy (no government) to answer the next question.All figures are in billions of dollars. Real GDPC + INet Exports$400$420$20450460205005002055054020600580206506202070066020If net exports increased by $10 billion at each level of GDP, the equilibrium real GDP would be
A. not determinable using this table. B. $610. C. $700. D. $650.
During 1990, a Hershey candy bar cost $.85. By 2007, the same Hershey candy bar cost $1.25. If the CPI was 130.7 in 1990 and 180.5 in 2007, the price of the 1990 Hershey candy bar in 2007 prices is
A) greater than the price of the 2007 Hershey candy bar. B) less than the price of the 2007 Hershey candy bar. C) equivalent to the price of the 2007 Hershey candy bar. D) perhaps greater than, perhaps less, or perhaps the same depending on whether the CPI in 2007 has been adjusted to reflect 2007 prices. E) not able to be determined given the information in the question.
When the U.S. exchange rate rises and the expected future exchange rate does not change, the expected profit from buying U.S. dollars today
A) also rises. B) falls. C) does not change. D) may rise, fall, or stay the same.
Explain whether you agree or disagree with the following statement: "The reason that inflation is bad is because it increases the cost of living — the costs of goods and services we buy — without increasing income in general."
What will be an ideal response?