For one person to be willing to lend money to another person, the interest rate must be high enough to compensate the lender for
A. the risk of deflation and bearing the risk of default.
B. the opportunity cost of risk and the principal.
C. the certainty of default and the certainty of inflation.
D. the time value of money and bearing the risk of default.
Answer: D
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Refer to the scenario above. Which among the following is a possible outcome if the number of bidders decreases to 45?
A) There will be no change in the outcome of the auction. B) The optimal bid for Molly will now be $831.11. C) The optimal bid for Molly will now be $745. D) The optimal bid for Molly will now be $845.
The demand schedule for a good: a. indicates the quantity that people will buy at the prevailing price
b. indicates the quantities that suppliers will sell at various market prices. c. indicates the quantities that will be purchased at alternative market prices. d. is determined primarily by the cost of producing the good.
_____ helps to estimate the rate of growth of GDP of a nation
a. The rule of 70 b. A compound growth rate c. An aggregate production function d. The rule of law
Opening an industry to international competition tends to:
A. increase the incidence of lazy monopolists. B. force lazy monopolists to increase efficiency. C. increase X-inefficiency. D. raise a monopolist's profit as the price is driven up.