Jake loaned Elwood $5,000 for one year at a nominal interest rate of 10 percent. After Elwood repaid the loan in full, Jake complained that he could buy 4 percent fewer goods with the money Elwood gave him than he could before he loaned Elwood the $5,000 . From this, we can conclude that the rate of inflation during the year was
a. -4 percent.
b. 4 percent.
c. 6 percent.
d. 14 percent.
d
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A negative externality is
A) a cost realized by the producer of a good or service. B) anything that is external or not relevant to the production of a good or service. C) a cost paid for by the consumer of a good or service. D) a by-product of an activity that hurts someone who is not involved in that activity.
A merger between the Ford Motor Company and General Motors would be an example of a
A) vertical merger.
B) horizontal merger.
C) conglomerate merger.
D) trust.
A reduction in sales will generally cause
A) an increase in profit per unit of capital. B) a decrease in profit per unit of capital. C) no change in profit per unit of capital. D) ambiguous effects on profit per unit of capital. E) none of the above
Explain why it is unwise to bid more than your valuation of the good in a sealed bid second-price auction
What will be an ideal response?