A risk-neutral individual will make investment decisions purely based on net present value because
A) she doesn't care about utility.
B) utility is a linear function of wealth.
C) she loves to take risk.
D) net present value is always more than expected utility.
B
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Everything that consumers purchase during a period is included as part of consumption when calculating GDP
a. True b. False
Which of the following is the best choice to eliminate a recessionary gap if the desired fiscal stimulus is $10 billion and the aggregate demand shortfall is $100 billion, while the MPC is 0.90?
A. Tax cut of $10 billion. B. Tax hike of $10 billion. C. Tax hike of $11.11 billion. D. Tax cut of $11.11 billion.
Pollution imposes costs on people and firms other than those involved in producing or consuming the product that produces pollution.
Answer the following statement true (T) or false (F)
In a free market, the market price and quantity in the above figure will adjust to equilibrium values of
A. $1 per gallon and 50 million gallons. B. $2 per gallon and 60 million gallons. C. $4 per gallon and 10 million gallons. D. $2 per gallon and 30 million gallons.