Which would you rather have? a) $100 today or b) $200 in 9 years if the interest rate is 8%.
What will be an ideal response?
a) $100; b) $200 x 50.02 = $100.04
The present value of b) $100.04 is greater than the present value of a) $100.
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As the price of good X increases from $5 to $8, quantity demanded falls from 100 to 80. Based upon this information we can conclude that the demand for X is
A) elastic. B) inelastic. C) unit inelastic. D) insufficient information for judgment.
Scott used $4,000,00 . from his savings account that paid an annual interest of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . His accountant calculated his profit to be:
a. $300,000 b. $100,000 c. $80,000 d. $20,000
Given the aggregate demand curve, a beneficial supply shock will:
a. increase potential output and the price level b. decrease potential output and the price level. c. increase potential output and decrease the price level. d. decrease potential output and increase the price level. e. cause no change in potential output or the price level.
Supply-side tax cuts are more likely to have the intended beneficial effect on
a. budget deficits. b. consumer spending. c. investment spending. d. net exports.