Q: If more Americans adopted a “live for today” approach to
If more Americans adopted a “live for today” approach to life, how would this affect saving, investment, and the interest rate?
See AnswerQ: If the interest rate is 10 percent, then the present value
If the interest rate is 10 percent, then the present value of $100 to be paid in 2 years is a. $80 b. $83. c. $120. d. $121.
See AnswerQ: Suppose that a country’s inflation rate increases sharply. What happens to
Suppose that a country’s inflation rate increases sharply. What happens to the inflation tax on the holders of money? Why is wealth that is held in savings accounts not subject to a change in the infl...
See AnswerQ: Bond A pays $8,000 in 20 years. Bond
Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 40 years. (To keep things simple, assume these are zero-coupon bonds, which means the $8,000 is the only payment the bondholder receives.) a. If t...
See AnswerQ: What is diversification? Does a stockholder get a greater benefit from
What is diversification? Does a stockholder get a greater benefit from diversification when going from 1 to 10 stocks or when going from 100 to 120 stocks?
See AnswerQ: Fortune magazine regularly publishes a list of the “most respected”
Fortune magazine regularly publishes a list of the “most respected” companies. According to the efficient markets hypothesis, if you restrict your stock portfolio to these companies, will you earn a b...
See AnswerQ: The main policy goal of the unemployment insurance system is to reduce
The main policy goal of the unemployment insurance system is to reduce the a. search effort of the unemployed. b. income uncertainty that workers face. c. role of unions in wage setting. d. amount of...
See AnswerQ: Why is frictional unemployment inevitable? How might the government reduce the
Why is frictional unemployment inevitable? How might the government reduce the amount of frictional unemployment?
See AnswerQ: Suppose that this year’s money supply is $500 billion, nominal
Suppose that this year’s money supply is $500 billion, nominal GDP is $10 trillion, and real GDP is $5 trillion. a. What is the price level? What is the velocity of money? b. Suppose that velocity is...
See AnswerQ: Draw the supply curve and the demand curve for a labor market
Draw the supply curve and the demand curve for a labor market in which the wage is fixed above the equilibrium level. Show the quantity of labor supplied, the quantity demanded, and the amount of unem...
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