The nominal interest rate on a loan with an annual inflation rate of and a real interest rate i is represented as:
a. i+i
b. i+i
c. i+i
d. i+-i
QUESTION 2If price is cut and demand is elastic, total revenue will rise because
A) the change in quantity demanded is greater than the percent change in price.
B) the percent change in quantity demanded is greater than the change in price.
C) the percent change in quantity demanded is greater than the percent change in price.
D) customers can't find substitutes.
QUESTION 3Which of the following is a close approximation of the price elasticity of demand for health care?
a. 0.2
b. 0.8
c. 1.8
d. 4.0
QUESTION 4Calculate the annual return earned by a lender on a sum of 800 lent out at 8 percent interest, if prices inflate at the rate of 5 percent per annum.
a. 909.03
b. 808.50
c. 800.67
d. 907.20
QUESTION 5If price is cut and demand is elastic, then
A) total revenue will fall.
B) total revenue will not change.
C) quantity demanded will fall.
D) total revenue will rise.
QUESTION 6U.S. national defense spending is approximately ____ the amount spent on health care.
a. twice
b. four times
c. ten times
d. 1/4
QUESTION 7A builder is planning to construct to a departmental store with an investment worth 1,200 . He receives proposals from two retailers interested to lease space in it assuring him future cash flows worth 1,000 at the end of the first year and 700 at the end of two years. If the building lasts only for two years and the discount rate is 15 percent, what would be the net present value of this project?
a. 300.50
b. 257.63
c. 198.67
d. 118.38
Quick Reply
