If the interest rate is 8 percent, then the present discounted value of $100 to be received two years from now is closest to
A. $116.00.
B. $86.00.
C. $96.00.
D. $128.00.
Answer: B
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As the Federal Reserve ________ bonds, interest rates rise and the price of bonds ________
A) sells; falls B) buys; rises C) sells; rises D) buys; falls
When an entrepreneur invests his own financial capital in order to start a business
A) the opportunity cost of capital should be included in the economic cost of doing business. B) the investment is treated as a fixed cost, so it should not be considered as a cost of doing business. C) the firm's economic profits will exceed its accounting profits. D) the accounting costs increase because the funds would otherwise have to be borrowed.
In-kind transfers include the direct transfer of
A. Education rather than housing. B. Cash rather than goods. C. Cash rather than medical services. D. Goods and services rather than cash.
If consumers have a long time to respond to an increase in electricity prices their demand is likely to be ________ than if they are only given a short time.
A. no different B. higher C. more elastic D. less elastic