A measure of absolute price changes that excludes changes in energy and food prices is called: A) fringe rate of inflation. B) core rate of inflation. C) overall inflation. D) none of the above. ANSWER B
Date: September 10th, 2020
An increase in the time to the promised future payment ________ the present value of the payment. A) decreases B) increases C) has no effect on D) is irrelevant to ANSWER A
Date: September 10th, 2020
In terms of location decisions, firms evaluate the extent to which the labor force is unionized. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
If the yield curve slope is flat for short maturities and then slopes steeply upward for longer maturities, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting A) a rise in short-term interest rates in the near future and a decline further out in the future. B) […]
Date: September 10th, 2020
When I purchase ________, I own a portion of a firm and have the right to vote on issues important to the firm and to elect its directors. A) bonds B) bills C) notes D) stock ANSWER D
Date: September 10th, 2020
What assumptions in the perfect competition model ensure that economic profit is zero in the long run? Explain. What will be an ideal response? ANSWER The assumptions that 1 ) market participants have perfect (complete) information and 2 ) there are no barriers to entry ensure that long-run profits will equal zero in a […]
Date: September 10th, 2020
What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent? A) $453.51 B) $500.00 C) $476.25 D) $550.00 ANSWER A
Date: September 10th, 2020
From the manager’s perspective: A) it is important to treat implicit costs as explicit in order to make sound strategic decisions. B) implicit costs are simply a theoretical construct and should be ignored in the decision-making process. C) only explicit costs matter because accounting profit is based on explicit costs. D) there is no difference […]
Date: September 10th, 2020
The goals of bank asset management include A) maximizing risk. B) minimizing liquidity. C) lending at high interest rates regardless of risk. D) purchasing securities with high returns and low risk. ANSWER D
Date: September 10th, 2020
Banks with excess reserves will supply more reserves to the federal funds market as the interest rate increases. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
