When an economy is on the balanced growth path, the growth rate of real GDP per capita is determined by the growth rate of
A) convergence.
B) capital accumulation.
C) total factor productivity.
D) the labor force.
C
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As a result of the Fed's actions during the 2008 financial crisis and banks' lending policies, the money multiplier ________ as a direct result of the ________
A) fell from about 9 to about 4; low risk experienced by banks because of the FDIC increasing their default coverage amounts B) decreased drastically; consistent decrease in banks' desired reserve ratios as they took on less risk C) rose from about 4 to about 9; surge in banks' desired reserve ratios as they took on less risk D) rose drastically; consistent decrease in banks' desired reserve ratios as they took on less risk E) fell from about 9 to about 4; surge in banks' desired reserve ratios as they took on less risk
What is one reason the federal government might "bail out" farmers in flood prone areas of the country?
A) Such flooding is not diversifiable and therefore only non-profit entities, such as the federal government, can cover the risks. B) Such flooding is diversifiable, but insurance company CEOs are more concerned with their stock-holder wealth than the well-being of farmers. C) Such flooding is diversifiable, but the market for such insurance policies cannot clear without the assistance of the International Community. D) Such flooding is known to happen on a regular basis and therefore there is no "risk" to be insured against.
A firm sets its output where
A) marginal profit minus marginal cost equals zero (MP - MC = 0). B) marginal revenue minus marginal profit equals zero (MR - MP = 0). C) marginal revenue minus marginal cost equals zero (MR - MC = 0). D) marginal revenue minus marginal cost is greater than zero (MR - MC > 0)
Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company. Assume an interest rate of 5%. Which project has the highest internal rate of return?
A. Project A
B. Project B
C. Project C
D. It cannot be determined from the information given.