You lend your sister's daughter $2,000 for a year, and at the end of the year she pays you $2,180. The interest rate you are charging her is
A. 1.1%.
B. 9%.
C. 10%.
D. 20%.
Answer: B
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Other things equal, in an open economy, monetary policy to offset a contractionary gap will tend to
a. Lower the exchange value of the dollar and lower net exports. b. Lower the exchange value of the dollar and raise net exports. c. Raise the exchange value of the dollar and lower net exports. d. Raise the exchange value of the dollar and raise net exports.
The market for new issues of stock is called the
a. primary market. b. secondary market. c. The New York Stock Exchange (NYSE). d. The Chicago Board of Trade.
Which of the following illustrates the concept of a negative externality?
a. A college professor plays a vigorous game of racquet ball with the racquet he recently purchased. b. A flood wipes out a farmer's corn crop. c. A college student plays loud music on his new stereo system at 2:00 a.m. d. A janitor eats a hamburger during his lunch break.
Which of the following is NOT consistent with the Permanent Income Hypothesis?
A. The theory would predict that people's consumption would be greater than their income until their mid to late 20s B. A person who won the lottery would spend only a small part of their winnings in the first year C. Consumption is smaller than income when people reach old age D. People gear their consumption to their expected earnings more than to their current income