The present value and the interest rate have:
A. no relationship.
B. an unclear relationship; whether it is direct or inverse depends on the interest rate.
C. a direct relationship; as i increases, pv increases.
D. an inverse relationship; as i increases, pv decreases.
Answer: D
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Which of the following would a bank NOT hold as insurance against the highest cost of deposit outflow-bank failure?
A) excess reserves B) secondary reserves C) bank capital D) mortgages
If everyone's utility function includes only conspicuous consumption goods:
A. the market will lead to higher social welfare than it otherwise would. B. the market will lead to lower social welfare than it otherwise would. C. we can say nothing about market and social welfare. D. the market will lead to the highest social welfare.
When firms advertise their products, they are attempting to:
A. shift the supply curve of the product to the right. B. shift the supply curve of the product to the left. C. shift the demand for the product to the right. D. shift the demand for the product to the left.
If U.S. residents boycotts French goods, this will
A) reduce the demand for euros in the foreign exchange market. B) increase the demand for euros in the foreign exchange market. C) cause the euro to appreciate. D) have no effect on the euro.