A profit-maximizing firm in a competitive market will earn zero accounting profits in the long run
a. True
b. False
Indicate whether the statement is true or false
False
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Describe the policy of "outright monetary transactions" or 0MT presented by the president of the European Central Bank in 2012
What will be an ideal response?
Increased output and prices in the United States in the early 1940s were mostly the result of increased government expenditures
a. True b. False Indicate whether the statement is true or false
Open market operations designed to fight inflation will drive interest rates _____ and bond prices ______.
Fill in the blank(s) with the appropriate word(s).
Suppose a family member approaches you to borrow $2,000 for the down payment on an automobile. You have the cash available in a savings account that currently earns 5% annual interest. You and the family member consider the following repayment options:(i) Borrower repays $259 each year over the next ten years(ii) Borrower repays $300 each year over the next five years, plus a lump-sum payment of $895 in the fifth year.(iii) Borrower repays you $2,100 at the end of one year. For each of the options above, show that the present values of each option are approximately equal. Then, relate each of the options above to the four types of bonds, indicating which option is equivalent to which type of bond. Explain why.
What will be an ideal response?