You win the $20 million state lottery, and you have a choice of taking an amount of money per year for the next 20 years or a flat payment now. The flat payment that the state offers you is $9.82 million
a. What discount rate is the state using?
b. Should you take the money or the annuity?
a. 8% (This is essentially the internal rate of return on the project.)
b. In general, it depends on what return you think you can get on the money. If you think you can do better than 8%, you're better off with the cash.
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Rent ceilings set below the equilibrium rent i. create a deadweight loss. ii. increase search activity. iii. result in a surplus of apartments
A) i only B) ii only C) i and iii D) i and ii E) i, ii, and iii
In the two-sector growth models, endogenous growth arises from
A) increased saving. B) the research sector. C) increased capital. D) the manufacturing sector.
Which of the following will discourage investment?
a. well-defined property rights b. monetary instability c. a low and steady rate of inflation d. low tax rates
As tax laws become more complex,
a. the administrative burden of taxes will increase. b. compliance costs are likely to decrease. c. the government will collect more in tax revenue. d. the amount of tax revenue lost to tax evasion will decrease.