Investment decisions are based on the trade-off between the:
A. potential profit that could be generated by investment and the cost of borrowing money to finance the investment.
B. interest rate that savers will earn and the interest rate that the borrowers will have to pay.
C. future value of the loan and the present value of the loan.
D. potential profit that could be generated and the willingness of a lender to make the loan.
A. potential profit that could be generated by investment and the cost of borrowing money to finance the investment.
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Germany and Japan pay a higher price for raising capital because of
A) having rather illiquid securities markets. B) unresolved stockholder-lender and manager-stockholder conflicts. C) allowing banks to hold substantial ownership shares in large firms. D) shutting large firms out of those securities markets.
The kinked demand curve depicts
A. cut-throat competition. B. cartels. C. collusive oligopoly. D. price leadership.
Economic takeoff:
A. occurs when development becomes self-sustaining. B. will eventually occur in all developing countries. C. typically occurs in the absence of foreign investment. D. has yet to occur in any developing country.
You lend your sister's daughter $2,000 for a year, and at the end of the year she pays you $2,180. The interest rate you are charging her is
A. 1.1%. B. 9%. C. 10%. D. 20%.