You deposit $5,000 in a 5-year bank CD that pays 3% interest per year. How much will you get from this deposit be at maturity?
A. $5,155
B. $5,751
C. $5,796
D. $6,500
C. $5,796
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Suppose the target exchange rate set by the Fed is 150 yen per dollar. If the demand for dollars permanently decreases, then the Fed
A) can permanently meet the target by selling dollars. B) can permanently meet the target by buying dollars. C) must violate both interest rate parity and purchasing power parity to permanently meet the target. D) cannot permanently maintain the target rate.
Which of the following is an example of a bank realizing economies of scope?
A) The bank develops a standard mortgage loan application to make the process of loaning out mortgages easier. B) The bank reduces costs of credit checking for the loan process by outsourcing the process to a specialist. C) By using the information collected from a corporation, the bank can decide how easy it would be to sell bonds issued by the corporation to the public. D) A bank in a rural area specializes in providing agricultural loans.
Crowding out refers to the effect that:
A. C and I are indirectly affected by changes in G. B. C is directly affected by changes in G. C. C and I are directly affected by changes in G. D. C and I are completely unrelated to changes in G.
Monopolists may in the long run
A. earn positive economic profit. B. be protected by barriers to entry. C. grow wealthy at the expense of their consumers. D. All of these responses are correct.