The present value of $100 to be received in the year 2014 is
A) less than the present value of $100 to be received in 2015.
B) greater than the present value of $100 to be received in 2015.
C) the same as the present value of $100 to be received in 2015.
D) greater than the present value of $100 to be received in 2015 if the interest rate in 2015 exceeds the interest rate in 2014; otherwise, it is less.
B
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Credential inflation results from
(a) a combination of cost-push inflation and demand-pull inflation. (b) rigidities in the industrial sector. (c) the need to select from among qualified applicants in the modern sector. (d) all of the above.
Bank capital is equal to
A) the value of the capital originally invested in the bank by its owners. B) the value of everything the bank owns. C) the difference between the value of the bank's assets and the value of its liabilities. D) the value of the buildings and other physical assets the bank owns.
Why can't private individuals always internalize an externality without the help of government?
a. Legal restrictions prevent side payments between individuals. b. Transactions costs may be too high. c. Side payments between individuals are inefficient. d. Side payments between individuals are insufficient.
You decide to lend $100 to a friend interest free for one year. You calculate that you could have earned 10% interest. What is the opportunity cost of the loan if it is paid on time?
A. $100 B. $10 C. $0 D. $110