If the interest rate is 5 percent and cash flows are $3,000 at the end of year one and $5,000 at the end of year two, then the present value of these cash flows is:
A. $8,400.34.
B. $400.74.
C. $7,392.29.
D. $4,222.50.
Answer: C
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Use the following graph to answer the next question.
Suppose the economy is in equilibrium at point B. A decrease in government purchases would most likely
A. move the economy downward from point B along AD2. B. move the economy from point B toward point A. C. move the economy upward from point B along AD2. D. move the economy from point B toward point C.
A rightward shift of the production possibilities frontier of an economy represents: (check all that apply)
a. an increase in the average price level in the economy. b. economic growth. c. an increase in the quantity of resources. d. an increase in the overall demand for goods and services in the economy.
Which of the following is NOT included in the M1 money supply?
A. checkable and debitable accounts B. currency C. passbook savings accounts D. traveler's checks
A cost-benefit analysis of the death penalty and lifetime incarceration must consider
A. the effects upon police morale. B. the expected present value of the total costs of the two punishment methods to the government. C. the costs borne by the victims of the crime. D. all of the options are correct.