The interest rate used to bring future sums back to present value is
A) always negative.
B) zero when there is no inflation.
C) the rate of discount.
D) the prime rate.
Answer: C
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Rent controls create distortions in the housing market by:
A. increasing the supply of housing in the long run. B. raising property values. C. encouraging landlords to overspend for maintenance. D. discouraging new housing construction.
A central bank that is buying its own currency might be trying to ________
A) weaken its currency B) increase the domestic money supply C) reduce domestic interest rates D) reduce inflation
For which of the following goods is the income elasticity of demand likely lowest?
a. water b. sapphire pendant necklaces c. filet mignon steaks d. fresh fruit
Suppose that the marginal revenue product of the eighth worker hired is $12 an hour and the wage rate is $10 an hour. We can say that
A. not enough labor is being hired. B. just enough labor is being hired. C. too much labor is being hired.