If you place $100 in a bank account that pays 6% at the end of each year, and you leave your $100 and all your interest in the bank, how much will you have in the bank at the end of 7 years with annual compounding?
A) (106)7
B) 7 ? (106)
C) 100 ? (1.60)7
D) 100 ? (1.06)7
D
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Suppose we are considering the milk market and we have two sets of values, as shown by the numbers in parentheses, which represent two points on a line: (59 billion quarts; $4) and (78 billion quarts; $6). This line is most likely a
A. production possibilities frontier for milk. B. supply curve for milk. C. demand curve for milk. D. ray through the origin. E. time series line.
If velocity does not change and the quantity of money grows at the same rate as does real GDP, then in the long run
A) the real interest rate is less than the nominal interest rate. B) the inflation rate equals zero. C) the nominal interest rate equals zero. D) the inflation rate equals the growth rate of the quantity of money. E) the nominal interest rate is less than the real interest rate.
The main factor that explains the difference between accounting cost and economic cost is
A) opportunity cost. B) fixed cost. C) variable cost. D) All of the above help to explain the difference.
If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:
A. inelastic. B. elastic. C. unit elastic. D. perfectly inelastic.