With regard to environmental programs and regulations, economic analysis indicates that
a. environmental quality is something that people value and, therefore, are willing to pay for.
b. people value many other things, but environmental values always come first.
c. income levels exert little impact on the demand for environmental quality.
d. the cost of an environmental policy matters little if the policy provides environmental health benefits.
A
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
________ refers to the time until debt must be repaid
A) Dividend B) Principal C) Maturity D) Time value of money
If the real interest rate is above the equilibrium real interest rate
A) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will fall. B) borrowers will be unable to borrow all of the funds they want to borrow and the real interest rate will rise. C) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will rise. D) borrowers will be unable to borrow all of the funds they want to borrow and the real interest rate will fall.
A two-period project has the following probabilities and cash flows:
Probability Cash flow Period 1: .25 500 .50 600 .25 700 Period 2: .30 300 .50 500 .20 700 The discount rate is 7%, and the initial investment is $1,000. How much is the expected NPV of this project?