If the present value of $110 to be received one year from now is $100, what will $100 be worth two years from now?
A. $100
B. $121
C. $110
D. can't say since we don't know what the interest rate is
Answer: B
You might also like to view...
Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. If there is no ordinance against loud music, the Coase theorem predicts that
A) Dudley will pay Angus to not play the bagpipes. B) Angus will pay Dudley so Angus can play the bagpipes. C) Dudley will do nothing and Angus will mop floors. D) no bargain can be reached between Angus and Dudley.
Refer to the scenario above. The interest that you will earn, after a year, is equal to:
A) $10. B) $30. C) $32.24. D) $52.
Oil prices have risen temporarily, due to political uncertainty in the Middle East. An advisor to the Fed suggests, "Higher oil prices reduce aggregate demand. To offset this we must increase the money supply
Then the price level won't need to adjust to restore equilibrium, and we'll prevent a recession." Analyze this statement using the IS—LM model.
If the government institutes a specific tax for a good that has a perfectly inelastic demand curve
A) the producer passes the entire tax on to the consumer. B) the producer must absorb the entire tax. C) the producer can generally only pass part of the tax onto the consumer. D) the equilibrium price drops.