What is the present value of a payment of $100 to be made one year from today if the interest rate is 6 percent?
a. $105.26
b. $105.00
c. $97.24
d. $94.34
d
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After a firm makes both short and long run adjustments in its production plan following a reduction in the wage,
A. the marginal product of labor will be higher. B. the marginal product of labor will be lower. C. the marginal product of capital will be unchanged. D. the marginal product of capital may be higher or lower depending on the degree of substitutability between capital and labor. E. (a) and (c) F. (a) and (d) G. (b) and (c) H. (b) and (d)
Action taken by the Fed to reduce the money supply will tend, all other things unchanged,
A) to reduce investment. B) to increase investment. C) to have no effect on net exports. D) to increase real GDP and the price level.
Use the figure below to answer the following question.
The figure above shows three supply curves for wheat. Which of the following would cause the supply of wheat to shift from S1 to S2?
A. an increase in the price of fertilizer B. a change in consumer tastes away from wheat bread C. the development of a more effective insecticide against cutworms D. a decrease in consumer incomes, assuming wheat is a normal good
If the marginal propensity to consume is 0.75, then the multiplier equals
A. 1/0.75. B. 1/(1 - 0.25). C. 1/(1 - 0.75). D. 0.75.