The opportunity cost of borrowing funds to finance government deficits is:
A. greatest when the economy is doing well.
B. greatest when the economy is in a recession.
C. zero.
D. the same regardless of the state of the economy.
Answer: A
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The central problem all individuals face is
A) greed. B) insufficient money income. C) scarcity of resources. D) the desire for present enjoyment. E) unequal wealth.
If a price ceiling were established above the equilibrium price,
A) it would have no effect on the quantity demanded. B) it would create a shortage. C) it would create a surplus. D) none of the above.
The intersection between the long-run aggregate supply and aggregate demand curves determines the: a. level of full-employment real GDP. b. level of prices (CPI)
c. money supply. d. marginal product. e. both a and b.
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Assume that the interest rate is 8.5%. What is the net present value of the decision to invest in college?
A. $136,877 B. $126,154 C. $12,487 D. $11,508