If the interest rate is positive, the present value of $1000 to be received in ten years is
A. equal to $1000.
B. either greater than $1000 or less than $1000, depending upon the interest rate
C. less than $1000.
D. greater than $1000.
Answer: C
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An advantage monetary policy has over fiscal policy is that monetary policy
A) can be quickly changed and implemented. B) is coordinated with fiscal policy. C) is approved by the president of the United States. D) affects consumption expenditure and investment without impacting international trade. E) has no multiplier effects.
The paradox of value between diamonds and water is explained by the fact that the
A) total utility of diamonds exceeds the total utility of water. B) marginal utility of diamonds exceeds the marginal utility of water. C) total utility of diamonds exceeds the marginal utility of water. D) marginal utility of diamonds exceeds the total utility of water.
Refer to Figure 15-2. If the firm's average total cost curve is ATC2, the firm will
A) suffer a loss. B) break even. C) make a profit. D) face competition.
For some products, purchases tend to decrease as the buyer's income increases. Such products are known as:
a. Normal goods b. Inferior goods c. Inverse goods d. Common goods