If $1,000 is placed in an account earning 8% annually, the balance at the end of seven years will be A) $1,080. B) $1,560. C) $2,000. D) $1,714. ANSWER D
Date: September 9th, 2020
If a currency such as the US$ is traded in a competitive market, a(n) ________ in demand for the US$ ________ the price of the US$ in terms of another currency such as the Japanese Yen (¥). A) increase; lowers B) increase; raises C) decrease; raises D) change; lowers ANSWER B
Date: September 9th, 2020
Stage III of the short-run Production Function is A) the most efficient mix of inputs. B) the least costly level of output. C) where additional units of variable inputs will lead to less output. D) where additional units of variable inputs will lead to more output. ANSWER C
Date: September 9th, 2020
The payback period for a project, requiring an initial outlay of $10,000 and producing ten uniform annual cash inflows of $1,500, is A) six years. B) six years and eight months. C) six years and six months. D) seven years. ANSWER B
Date: September 9th, 2020
Which of the following is likely to increase the exchange rate of Yen to euros (¥/¬)? A) an increase in investment opportunities in the U.S. B) a decrease in investment opportunities in the eurozone C) an increase in demand for European goods in Japan D) a decrease in demand for European goods in Japan […]
Date: September 9th, 2020
A firm using two inputs, X and Y, is using them in the most efficient manner when A) MPx = MPy. B) Px = Py and MPx = MPy. C) MPx/Py = MPy/Px. D) MPx/MPy = Px/Py. ANSWER D
Date: September 9th, 2020
The net present value of a project is calculated as A) the future value of all cash inflows minus the present value of all outflows. B) the sum of all cash inflows minus the sum of all cash outflows. C) the present value of all cash inflows minus the present value of all cash outflows. […]
Date: September 9th, 2020
The “Law of Diminishing Returns” states that A) additional inputs will reduce output. B) additional inputs will decrease average productivity. C) the supply of inputs is becoming scarce. D) additional inputs will lead to less additional output. ANSWER D
Date: September 9th, 2020
A proposed project should be accepted if the net present value is A) positive. B) negative. C) larger than the internal rate of return. D) smaller than the internal rate of return. ANSWER A
Date: September 9th, 2020
A person who generally drives without a seat belt on does not reveal this to his automobile insurance company before he purchases insurance. This is an example of A) adverse selection. B) moral hazard. C) signaling. D) screening. ANSWER A
Date: September 9th, 2020
