When two mutually exclusive projects are considered, the NPV calculations and the IRR calculations may, under certain circumstances, give conflicting recommendations as to which project to accept
The reason for this result is that in the NPV calculation, cash inflows are assumed to be reinvested at the cost of capital, while in the IRR solution, reinvestment takes place at A) the hurdle rate.
B) the accounting rate of return.
C) the prime rate.
D) the project's internal rate of return.
D
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According to the equation of exchange, if nominal GDP equals $6 trillion and the money supply equals $1 trillion, the velocity of money: a. must be 6
b. must be 1/6. c. must be 6 trillion. d. must be 1/6 trillion. e. cannot be determined unless we know the price level.
he price at the intersection of the ______ curve and the ______ curve is called the equilibrium price.
a. individual supply; market demand b. individual supply; individual demand c. market supply; individual demand d. market supply; market demand
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Increases in productivity are caused by
A. better education and training of the labor force. B. higher levels of literacy. C. improvements in technology. D. All of these responses are correct.