On January 1, 2010, a homeowner borrowed $5,000 for a term of six months to complete some home improvements, paying an annual interest rate of 8 percent. How much principal and interest will the homeowner pay back on July 1, 2010?
a. $2,500
b. $2,900
c. $5,200
d. $5,400
c
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Autonomous expenditure is the component of
A) induced expenditure that changes when in real GDP changes. B) aggregate planned expenditure that changes only when government expenditure on goods and services change. C) aggregate expenditure that does not change when real GDP changes. D) aggregate expenditure that does not change when the interest rate changes. E) aggregate expenditure that changes when real GDP changes.
If velocity is equal to 6, and the quantity of money is $50 billion, according to the equation of exchange, nominal GDP is equal to
A) $300 billion. B) $150 billion. C) $18 billion. D) $8.3 billion. E) $56 billion.
Suppose the target exchange rate set by the Fed is 100 guilders per dollar. If the demand for dollars temporarily decreases, to maintain the target exchange rate, the Fed can
A) sell dollars. B) buy dollars. C) increase U.S. exports. D) increase U.S. imports.
According to classical economists, a decrease in the rate of interest will
A) increase unemployment. B) increase consumer saving. C) increase business investment. D) increase business failures.