A manufacturing firm is deciding whether to invest in a new printer that needs an initial investment of $150,000. This will increase cash flows in the first year by $80,000 and $75,000 in the second year. If the interest rate is 10% then the net present value of these cash flows is
a) $5,000
b) - $9,091
c) -$15,290
d) -$21,901
Answer: c) -$15,290
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The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, at the equilibrium quantity, the marginal private cost is
A) zero. B) $14,000. C) $19,000. D) $16,000.
When the Federal Reserve sells a government security to a bond dealer, which transmits payment from a transactions deposit account at a bank
A) the cash of the Federal Reserve will decrease. B) the net worth of the commercial bank will decrease. C) the loans of the commercial bank will increase. D) the money supply will decrease.
Immediately following the Revolution, in the 1780s,:
a. indigo was the most important U.S. export (in terms of dollar value). b. Spain placed severe restrictions on trade between its colonies and the U.S. c. the U.S. became the main provider of shipping services for the French and West Indies. d. Great Britain eliminated tariffs on rice and tobacco.
When nominal interest rates are high, the velocity of money should:
A. not change; the velocity of money does not vary with the interest rate. B. decrease by the same percent that the nominal interest rate has increased. C. also be high. D. be low.