Explain why a firm may rationally make an investment when its cash flow from the investment is not positive each year
What will be an ideal response?
A firm will examine the net present value of the investment to determine if the investment should be made. The net present value of the cash flow for an investment may be negative for some years, but when all the years of the investment are considered, if the net present value of the investment is positive, the investment should be made.
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Comparative advantage is determined by
A) actual differences in labor productivity between countries. B) relative differences in labor productivity between countries. C) Both A and B. D) Neither A nor B.
Credit cards are a popular means of payment. Why are credit card accounts not included in M1 or M2? Are credit cards of no relevance to these money measures?
What will be an ideal response?
________: a quantitative restriction on the amount of a product that may enter a country during the time period
Fill in the blank(s) with correct word
An economist estimates that with every 20 percent increase in income, the quantity of grapes purchased rises by 11.2 percent. From this information one would conclude that grapes are:
A. a normal good. B. not demanded. C. a luxury. D. an inferior good.