Suppose a manager is deciding whether or not to purchase a piece of equipment to make an input internally and has completed the majority of the net present value (NPV) calculations. The manager has correctly calculated the NPV to be equal to: NPV = ($1.052 × Q) - $250,000, where Q is the annual quantity of the input the firm needs. In order for the NPV to be positive, the firm needs at least
________ units of the input each year.
A) 115,960
B) 259,600
C) 237,643
D) 220,890
C) 237,643
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If the total revenue collected by the federal government in a particular year is $1.2 billion and the total amount spent by the government during the same year is $3.8 billion, what is the budget deficit?
A) $1.6 billion B) $2.6 billion C) $2.2 billion D) $5 billion
The price of a good will fall if
A) there is a surplus at the current price. B) the current price is less than the equilibrium price. C) the quantity demanded exceeds the quantity supplied. D) the price of a complement in consumption falls.
Describe how actual reserves are calculated and explain the difference between desired reserves and excess reserves. How do reserves affect the amount of loans a bank can make?
What will be an ideal response?
Which of the following is not a valid criticism of discretionary fiscal policy? a. The implementation of fiscal policy is sometimes difficult
b. Time lags in fiscal policy are long. c. Fiscal policy works only during periods of stagflation. d. Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income. e. Fiscal policy might have undesirable long-term effects on aggregate supply.