Which of the following results in the greatest present value if the interest rate is 10%?
a. A perpetuity that pays $10 per year.
b. One hundred dollars tomorrow.
c. A payment of $111 at the end of this year.
d. One hundred dollars today.
c. A payment of $111 at the end of this year.
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Lower U.S. interest rates cause the value of the dollar to
A) fall, making U.S. goods relatively more expensive on world markets. B) fall, making U.S. goods relatively cheaper on world markets. C) rise, making U.S. goods relatively more expensive on world markets. D) rise, making U.S. goods relatively cheaper on world markets.
The capture theory of regulation predicts that
A) regulation helps producers to maximize profits. B) regulators capture the firm's economic profit and transfer it to consumers as consumer surplus. C) regulators eliminate the deadweight loss a monopoly can create. D) resources are used efficiently. E) regulators capture the firm's economic profit and transfer it to themselves.
Refer to the information provided in Figure 6.6 below to answer the question(s) that follow.
Figure 6.6Refer to Figure 6.6. Bill's budget constraint is BD. Bill's income is $800, the price of a bell pepper is $1, and the price of a bag of black beans is $1. At point B Bill is buying ________ bell peppers and ________ bags of black beans.
A. 400; 400 B. 0; 800 C. 800; 0 D. 600; 200
The government increases taxes. As a result, in the short run, real GDP ________ and the price level ________
A) increases; rises B) decreases; falls C) decreases; rises D) increases; falls