A builder is planning to construct to a departmental store with an investment worth $1,200 . He receives proposals from two retailers interested to lease space in it assuring him future cash flows worth $1,000 at the end of the first year and $700 at the end of two years. If the building lasts only for two years and the discount rate is 15 percent, what would be the net present value of this
project?
a. $300.50
b. $257.63
c. $198.67
d. $118.38
C
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If the price level increases, there is ________ the AD curve and the quantity of real GDP demanded ________
A) a movement upward along; increases B) a leftward shift in; decreases C) a movement downward along; increases D) no change in; does not change E) a movement upward along; decreases
When the supply of labor increases, the labor supply curve ______.
a. shifts upward b. shifts downward c. shifts to the right d. shifts to the left
Business cycles in the United States
A. Are similar in frequency and intensity. B. Are remarkably similar in length but vary greatly in intensity. C. Are similar in length, frequency, and intensity. D. Vary greatly in length, frequency, and intensity.
A temporary supply shock, such as a one month decrease in oil prices, would
A. decrease the marginal product of capital and decrease desired investment, decreasing the real interest rate in equilibrium. B. have little or no effect on desired investment, thus not changing the real interest rate by much in equilibrium. C. increase the marginal product of capital and increase desired investment, increasing the real interest rate in equilibrium. D. increase both the marginal product of capital and the marginal product of labor in the long-term future, thus raising the real interest rate in equilibrium.