A firm has three different investment options. Option A will give the firm $10 million at the end of one year, $10 million at the end of two years, and $10 million at the end of three years. Option B will give the firm $15 million at the end of one year, $10 million at the end of two years, and $5 million at the end of three years. Option C will give the firm $30 million at the end of one year,
and nothing thereafter. Which of these options has the highest present value?
a. Option A
b. Option B
c. Option C
d. The answer depends on the rate of interest, which is not specified here.
c
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The above table has information about the hypothetical economy of Robotica. Based on the data, the size of M2 is
A) $2,600 billion. B) $2,610 billion. C) $610 billion. D) $600 billion. E) $1,710 billion.
Which statement is consistent with what Keynes believed about consumption and disposable income?
A) Consumption depends upon disposable income and falls as disposable income rises. B) Consumption rises by the same amount as disposable income rises. C) Consumption rises by less than disposable income rises. D) Disposable income depends upon consumption.
A company that continues to have strong profit performance during an economic downturn when many other companies are suffering losses or failing should see:
A. the demand for their bonds decrease and their yields decrease. B. the demand and price for their bonds decrease. C. an increase in the yield of their bonds and the price of the bond increases. D. their bond rating maintained or actually increase.
An association of producers in an industry that agree to set common prices and output quotas to prevent competition is
A. a cartel. B. a monopolistic competitor. C. a constrained monopoly. D. an oligopolist.