You own 100 shares of stock that are earning $2 per share per year. According to market analysts, the stock is expected to continue to earn $2 long into the future. Using the annuity rule, and assuming an interest rate of 6.5 percent, it follows that the present value of these 100 shares is:
A. $30.77.
B. $3,076.92.
C. $30,076.92.
D. $307.79.
Answer: B
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Marginal profit is negative when:
A) marginal revenue is negative. B) total cost exceeds total revenue. C) output exceeds the profit-maximizing level. D) profit is negative.
Which of the following would cause aggregate demand to decrease?
A. Businesses and households believe that the economy is headed for good times, so they begin to feel increased security about their jobs. B. A drop in the foreign exchange value of the dollar C. The Fed increases the amount of money in circulation. D. The government increases taxes on both business and personal income.
The study of how people make decisions in situations where attaining their goals depends on their interactions with others is called
A) game theory. B) dominant strategy equilibrium. C) the prisoner's dilemma. D) Nash equilibrium.
The effect of an increase in investment on real GDP will be greater, the larger the:
a. MPC. b. APC. c. MPS. d. APS.