When interest rates rise,
A) borrowing costs decline, and total planned real expenditures decline.
B) borrowing costs increase and total planned real expenditures increase.
C) borrowing costs decline, and total planned real expenditures increase.
D) borrowing costs increase, and total planned real expenditures decline.
D
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If you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is
A) 7 percent. B) 22 percent. C) -15 percent. D) -8 percent.
Suppose coal sells for $50 per ton and can be mined at a constant marginal cost of $20 per ton. Forecasters predict that the price of coal next year will be $55
If your marginal cost next year will still be $20 and the interest rate is 10%, do you sell coal today?
Which of the following is a production decision?
A. How much output the firm should produce in the long run. B. Whether the firm should shut down or produce. C. Whether the firm should merge with one of its rivals. D. Whether the firm should exit or enter the market.
When spending falls short of output, additional inventories are created
a. True b. False Indicate whether the statement is true or false