Assuming a market rate of interest equal to 7 percent and anticipated inflation is 2 percent, what is the real (adjusted for inflation) present value of $200 to be received one year from today?
A. $187
B. $210
C. $190
D. $214
Answer: C
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An export is a product
A) produced in a foreign country and purchased by the residents of the home country. B) produced in the home country and sold in another country. C) produced in and sold to the residents of a foreign country. D) produced in and purchased by residents of the home country.
Of the following, which good has the most elastic demand?
A) food B) breakfast food C) cereal D) Post Raisin Bran E) Post Raisin Brand purchased at a Safeway grocery store
If the production of a good involves negative externalities, ________
A) the quantity of the good supplied in the market is lower than the efficient level B) the optimal price of the good is higher than the price charged in the market C) total welfare can be increased by increasing the production of the good D) average cost of production can be reduced by increasing output above the optimal level
In the long run, an increase in government purchases of military equipment would cause output to ________ and the aggregate price level to ________
A) stay constant; fall B) fall; fall C) fall; stay constant D) stay constant; rise