The present discounted value of a future payment will increase when the
A. Risk of nonpayment increases.
B. Future payment is moved further into the future.
C. Opportunity cost of money increases.
D. Interest rate decreases.
Answer: D
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If the price of chewing gum is represented by P in equation P = 25 - 0.5 QD, then the corresponding quantity of chewing gum demanded is represented by the demand equation
A) QD = 2P - 0.5. B) QD = 0.5P + 25. C) QD = -5 + 10P. D) QD = 50 -2P.
The base year matters for the computation of real GDP because
A) otherwise we cannot compute growth rates. B) relative prices can change over time. C) it allows an international comparison of GDP. D) it establishes a target for macroeconomic policy.
Which of the following statements is true about the behavior of the CPI?
a. It has risen steadily since 1960. b. It has fallen steadily since 1960. c. It fell during the 1960s and has risen ever since. d. It rose sharply in the 1970s and then declined in the 1980s. e. It has risen and fallen with roughly equal frequency since 1960.
Who observed that "in this world nothing is certain but death and taxes"?
a. Mark Twain
b. P.T. Barnum
c. Ben Franklin
d. Richard Nixon