If the price of pizzas falls, the demand for submarine sandwiches (a substitute good) increases
Indicate whether the statement is true or false
F
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Your firm is evaluating a potential investment in new machinery, but the manager in charge of the project uses an opportunity cost of capital that is too large. How does this error affect the projected net present value of the firm's investment?
A) NPV is overstated B) NPV is understated C) NPV is unaffected D) NPV changes from positive to negative
An increase in the discount rate will lead to a decrease in the money supply
a. True b. False
What will decrease SRAS?
a. improvements in technology b. increases in the capital shock c. decreases in consumer confidence d. increases in wages
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.