How might the discount rate used in project appraisal be adjusted to account for environmental concerns? Is there a better way to address these concerns?
What will be an ideal response?
Some suggest higher discount rates, to account for future environmental damage and make environmentally sound projects show a better return. Others prefer to specify environmental costs in the calculation of net present value.
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Risk averse individuals will fully insure to avoid risk. ?
Answer the following statement true (T) or false (F)
If there is persistent inflation
A) long-run aggregate supply is growing at a faster rate than aggregate demand. B) long-run aggregate supply is growing at a slower rate than aggregate demand. C) there is an excess of total planned expenditures. D) long-run aggregate supply is constant.
Having more relevant instruments
A) is a problem because instead of being just identified, the regression now becomes overidentified. B) is like having a larger sample size in that the more information is available for use in the IV regressions. C) typically results in larger standard errors for the TSLS estimator. D) is not as important for inference as having the same number of endogenous variables as instruments.
If health care spending is already on the flat of the curve, it may not be possible to improve health status by increasing spending. In this situation, the best way to improve health status may be to:
a. improve overall educational attainment so people can better follow the advice from the medical community. b. increase the availability of government health insurance. c. improve life-style decisions by reducing smoking, alcohol consumption, and drug use. d. invest in biotechnology to determine the genetic factors that improve health. e. improve access to medical care.