An investment that has the same features, such as risk and ease of selling, as the investment being considered by buyers and sellers is referred to as a(n):
a. equivalent investment.
b. comparable investment.
c. twin investment.
d. dual investment.
e. duplication investment.
b
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The budget line and the indifference curve are geometric devices used to provide a closer look at consumer choice.
Answer the following statement true (T) or false (F)
The authors note that an appropriate discount rate for most U.S. households is near 5%. However, suppose you are considering the decision to attend graduate school, and you already have large credit card balances from your undergraduate years
If you decide to use a higher discount rate (e.g., 10%) to reflect your higher opportunity cost of money, what impact does this change in the discount rate have on the net present value of a graduate degree? A) Increases NPV B) Decreases NPV C) NPV would not change as long as we use nominal costs and returns. D) NPV may increase or decrease, and we cannot determine the direction of change without more information.
Suppose U.S. consumers start buying more English shoes and fewer U.S. shoes. What impact will this trend have on the foreign exchange market?
a. U.S. demand for foreign exchange, in general, and British pounds, in particular, will increase. b. U.S. demand for foreign exchange, in general, and British pounds, in particular, will decrease. c. U.S. demand for British pounds will increase, but the demand for foreign exchange will probably decrease. d. U.S. demand for British pounds will decrease, but the demand for foreign exchange will probably increase. e. There is no effect on foreign exchange.
Because of recent corporate downsizing, Chuck loses his job. The most likely effect on his consumption function is a(n)
a. movement downward along the function. b. shift upward of the function. c. shift downward of the function. d. increase in consumption expenditures.