The value of a loan of $500 after a year at 3 percent interest is:
A. $509.
B. $1,500.
C. $515.
D. $565.
Answer: C
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According to the law of one price, identical products should sell for the same price everywhere if
A) transactions costs are zero. B) consumers have knowledge of the prices charged for products in different markets. C) there are no tariffs or other restrictions on imports or exports. D) firms can prevent consumers from engaging in arbitrage.
In the real intertemporal model with investment, there is intertemporal substitution with respect to
A) consumption and leisure. B) government spending. C) capital. D) current consumption.
A capital gains tax acts to
A) reduce the interest rate received by loan demanders. B) increase the interest rate received by loan demanders. C) increase the interest rate received by loan suppliers. D) reduce the interest rate received by loan suppliers.
The equilibrium price is best defined as the price at which
a. demand is smaller than supply b. suppliers want to supply more goods c. demanders want to buy more goods d. quantity demanded is equal to quantity supplied e. the quantity demanded increases