A competitive market may misallocate resources over time because
A. current profits are worth more than future profits because of the time value of money.
B. current profits are worth less than future profits because of the time value of money.
C. the Federal Reserve sets interest rates different than the opportunity cost of consuming now versus later.
D. the Federal Reserve always prefers capital investment over personal consumption.
Answer: C
You might also like to view...
Suppose Canada has a population of 30 million people and a labor force participation rate of 2/3. Furthermore, suppose the natural rate of unemployment in Canada is 7%. If the current number of unemployed people is 1.4 million people, what can we conclude about Canada's economy?
A. The unemployment rate is above the natural rate of unemployment. B. The unemployment rate is below the natural rate of unemployment. C. There is cyclical unemployment present in the economy. D. There is no cyclical unemployment present in the economy.
Based on the per capital income data for selected countries in 2009, India, Brazil, and China can be categorized as high-income economies
Indicate whether the statement is true or false
Analysis that is limited to making either purely descriptive statements or scientific predictions is
A. macroeconomics. B. normative economics. C. positive economics. D. microeconomics.
Which of the following is NOT a disadvantage of a proprietorship?
A. ability to raise capital B. the disposition of the firm when the owner dies C. how profits are taxed D. unlimited liability