Consider a bond that costs $1000 today and promises a one-time future payment of $1,080 in four years. What is the approximate interest rate on this bond?
A. 8%
B. 2%
C. 10.8%
D. 4%
Answer: B
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How might the globalization of financial markets affect the role of financial frictions in business fluctuations?
What will be an ideal response?
Marginal profit is negative when:
A) marginal revenue is negative. B) total cost exceeds total revenue. C) output exceeds the profit-maximizing level. D) profit is negative.
Which of the following is considered a major player in the financial system?
A. Speculators B. Entrepreneurs C. Intermediaries D. Students
How did the information revolution that kicked in during the late 1990s increase productivity?
A. Businesses learned how to use foreign suppliers to cut costs. B. Businesses were able to sell in larger markets through their websites. C. Businesses learned how to use computers to produce more output with fewer workers. D. Businesses began using the Internet to provide online training for workers.