Samantha is lending Jack $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they both expect it to be 1.68 in one year. If Samantha and Jack agree that Samantha should earn a 3 percent real return for the year, the nominal interest rate on this loan should be ________ percent.
A. 8
B. 11
C. 3
D. 5
Answer: A
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A probability weighted value is referred to as a(n):
A) discount value. B) reduced value. C) expected value. D) future value.
Which of the following types of government spending is included in the calculation of GDP?
A. Federal, state, and local government spending for any purpose. B. Federal spending only. C. Federal, state, and local spending on transfer payments only. D. Federal, state, and local government spending on goods and services only.
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Indicate whether the statement is true or false
Which of the following is not a potential drawback to public provision of public goods?
a. Public provision lacks clear signals about the value of the good being produced, possibly leading to under and over provision of the goods. b. Many collective consumption goods might be overproduced private goods. c. Public provision often implies taxation, which creates an excess burden that might overwhelm any efficiency gains. d. Many collective consumption goods are really impure private goods and thus the efficient level of output is never reached.