Allen Steel Company is considering whether to build a new mill. If the interest rate rises,
a. the present value of the returns from the mill will fall, so Allen will be less likely to build the mill.
b. the present value of the returns from the mill will fall, so Allen will be more likely to build the mill.
c. the present value of the returns from the mill will rise, so Allen will be less likely to build the mill.
d. the present value of the returns from the mill will rise, so Allen will be more likely to build the mill.
a
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When housing prices decrease, household wealth ________ and consumption ________.
A. increases; decreases B. increases; increases C. decreases; increases D. decreases; decreases
If the real rate of return is 2 percent, and the inflation rate is 0 percent, then the nominal interest rate must be:
A. 2 percent. B. 0 percent. C. 4 percent. D. ?2 percent.
The existence of economic losses induces firms to:
A. enter an industry, which shifts the market supply curve to the left and decreases market price. B. enter an industry, which shifts the market supply curve to the right and decreases market price. C. exit an industry, which shifts the market supply curve to the right and decreases market price. D. exit an industry, which shifts the market supply curve to the left and increases market price.
Is the claim that environmental standards reduce industrial competitiveness valid?
A) Yes, because environmental standards raise costs to businesses. B) No, because consumers will want to buy from firms that pollute less. C) No, because environmental standards have little effect in high-income countries. D) Yes, because environmental standards will cause the imposition of WTO sanctions.