Which of the following represents the correct formula for present value?
A) Present value = Payment T periods from now × (1 + interest rate)T
B) Present value = Payment T periods from now - (1 + interest rate)T
C) Present value = Payment T periods from now + (1 + interest rate)T
D) Present value = Payment T periods from now / (1 + interest rate)T
D
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Using economic analysis to help understand world issues
a. assumes that all decision makers use detailed economic analysis b. highlights the role of choice when resources are scarce c. has unlimited application d. is not appropriate because reality is too complex for economic modeling e. typically enables one nation to gain only when another nation loses
When unions successfully raise wage rates,
a. the employer must cut benefits b. fewer workers may be employed c. there is decreasing pressure for workers to join the market d. a strike occurs e. the monopsony keeps the same return to monopsony power
Spending VCU4 on real-world goods and services causes the nation's:
a. Monetary base to rise. b. M2 money multiplier to rise. c. M2 money multiplier to fall. d. Monetary base to remain the same.
The self-interest model predicts that the outcome of the "ultimatum bargaining game" in which the allocator starts with $20 is that
A. the allocator will offer the receiver $0.01 and will propose to keep $19.99 for himself. B. the receiver will always reject the allocator's proposal. C. the allocator will offer the receiver $10 and keep $10 for himself. D. the allocator will always keep the full $20.