To determine whether an investment makes sense, a business will compute the net present value, and if the result is
A. positive, they will make the investment.
B. positive, they will not make the investment unless the interest rate rises.
C. positive, they will not make the investment regardless of the change in interest rates.
D. negative, they will make the investment.
Answer: A
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In a competitive market, an efficient allocation of resources is characterized by:
a. a price greater than the marginal cost of production. b. the possibility of further mutually beneficial transactions. c. the largest possible sum of consumer and producer surplus. d. a value of consumer surplus equal to that of producer surplus.
The United States represents a pure command system, with government directly accounting for a little more than one-half of all economic activity
Indicate whether the statement is true or false
When banks hold more reserves than are required, such reserves are called
A) total reserves. B) required reserves. C) excess reserves. D) loan reserves.
An alternative to maintaining an overvalued currency is to ________ the fundamental value of the exchange rate by ________ monetary policy.
A. increase; easing B. decrease; tightening C. decrease; easing D. increase; tightening