Suppose you purchase a new home for $300,000, making a down payment of 50% and taking out a mortgage on the balance. What is the return on your investment in your home if one year later the price of your home increases by 50%?
A) 0%
B) 10%
C) 50%
D) 100%
D
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Offering an expensive engagement ring to your (future) bride is a
a. Screening mechanism b. Signaling mechanism c. Way to waste money d. None of the above
An economic boom predicts the new equilibrium wage would be:
A. lower because the labor demand curve shifts left. B. higher because the labor demand curve shifts left. C. lower because the labor demand curve shifts right. D. higher because the labor demand curve shifts right.
If MU = MC = P, an economist can judge with certainty that the distribution of output is
A. fair. B. equal. C. unbiased. D. efficient.
The price that a person must pay in order acquire purchasing power now rather than in the future is called
a. the interest rate. b. the foreign exchange rate. c. the inflationary premium. d. the risk premium.