If the interest rate is 5 percent, the net present value of $200 to be received two years from now is
a. $165.29.
b. $181.41.
c. $200.
d. $210.
B
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If the elasticity of demand were positive what would this imply about the shape of the demandcurve? Why is it that we are unlikely to find a price elasticity of demand with a positive value?
What will be an ideal response?
Comparisons of business cycles before and after World War II show that
a) there has been no significant change in the nature of business cycles b) the amplitude of business cycles has increased in recent years c) diminishing foreign trade has successfully reduced volatility in the post-war period d) expansions have lengthened and contractions have shortened e) recessions have become shorter but deeper, while expansions have become shorter with higher growth rates
Suppose the majority of the shares of British Airways stock were sold to a firm in the United States. Assuming all else remains constant, this will
A) create a capital inflow in the United States. B) decrease the balance of the U.S. financial account. C) increase net portfolio investment in the United States. D) decrease the balance of the U.S. current account. E) decrease foreign direct investment in the United States.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and net nonreserve international borrowing/lending balance in the context of the Three-Sector-Model? a. The real risk-free interest rate falls
and net nonreserve international borrowing/lending balance becomes more positive (or less negative). b. The real risk-free interest rate falls and net nonreserve international borrowing/lending balance becomes more negative (or less positive). c. The real risk-free interest rate rises and net nonreserve international borrowing/lending balance becomes more negative (or less positive). d. The real risk-free interest rate and net nonreserve international borrowing/lending balance remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.