$1 received n years from now has a value today of
A) ($1 + i)/i.
B) $1/(1 + i).
C) ($1 + i /i.
D) $1/(1 + i .
D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
One result of a contractionary monetary policy would be
A) a decline in the price level. B) an increase in the money supply. C) an increase in business investment. D) lower interest rates.
The option-value principle can be roughly stated as "more choices can't make a person worse off.". Are there any exceptions to this rule? Choose all that apply. a. No
b. Yes, in strategic situations. c. Yes, in situations involving self-control. d. Yes, for certain complicated financial derivatives.
Consider the following three bonds, Bond F, Bond J and Bond P. Bonds F and P mature in 1 year while Bond J matures in 2 years. Bond F and J have a face value of $10,000 while Bond P has a face value of $12,000 . If the interest rate is 15%, rank the three bonds from highest present value to lowest present value
a. Bond F, Bond P, Bond J b. Bond P, Bond F, Bond J c. Bond J, Bond F, Bond P d. Bond P, Bond J, Bond F e. Bond F, Bond J, Bond P