If the interest rate is 7 percent, the value of $350 today after one year would be
A. $357.00.
B. $362.50.
C. $374.50.
D. $387.75.
Answer: C
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In late 2007, the Fed began a series of cuts in the federal funds rate. Because the core inflation rate was about two percent, the most likely reason for these interest rate cuts was
A) to increase the real interest rate. B) to avoid a recession. C) to encourage households to save more money. D) to reduce the natural unemployment rate. E) to raise the price of the dollar in the foreign exchange market.
Define opportunity cost. A student who has just graduated from college has three job offers: the first job pays him $35,000 a year, the second job pays him $23,000 a year, and the third one pays him $15,000 a year
What is the student's opportunity cost of taking the first job?
Suppose that the preferences a typical American has for quantities of electricity (E) and gasoline (G) is given by U(E,G) = a ln(E) + (1 - a) ln(G) where 0 < a < 1
Suppose the prices of gasoline and electricity in the units provided are both $1/unit and the consumer has an income of $100. Suppose in addition, the government has chosen to ration electricity by allowing a maximum consumption of 50 units of electricity (E ? 50). a. If a = .25, find the optimal consumption bundle of gasoline and electricity. Does the electricity rationing constraint have an influence on consumer's choice? b. If a = .75, find the optimal consumption bundle of gasoline and electricity. Does the electricity rationing constraint of the government have an influence on the consumer?
If the rate of technological change increases, the result will be that
a. the growth rate of productivity will decrease and firms' profits will increase b. the growth rate of productivity will increase and firms' profits will decrease c. most individuals will likely lose their jobs due to lack of skills d. the growth rate of productivity will increase and living standards will increase e. firms' profits will increase and living standards will decrease