An increase in the market interest rate, other things equal, will _____.

An increase in the market interest rate, other things equal, will _____.
 a. have no effect on investment
 b. increase the amount invested since the rate of return will be lower
 c. increase the amount invested because income will increase
 d. reduce the amount invested because the opportunity costs of investing will be higher
  e. increase the amount invested because the rate of return will be higher

QUESTION 2

From an economic perspective, the socially best amount of pollution control is that amount in which:
 a. there is zero pollution.
  b. the private plus external marginal costs are equal to the private plus external marginal benefits.
  c. the private plus external marginal costs are less than the private plus external marginal benefits.
  d. the private marginal costs are equal to the private marginal benefits.
  e. the external costs equal the external benefits.

QUESTION 3

If a bank has 50,000 in excess reserves at the end of a business day and the required reserve ratio is 20 percent, the bank can increase its profits by:
 a. keeping the excess reserves.
 b. loaning out 40,000.
 c. loaning out 50,000 to another bank.
 d. borrowing 50,000 to remove the excess reserves.
 e. keeping 10,000 and depositing 40,000 with the Fed.

QUESTION 4

If the market interest rate equals 8 percent, the opportunity cost of the last new investment project undertaken would approximately be equal to _____.
 a. zero percent
  b. 4 percent
 c. infinity
 d. 8 percent
 e. 16 percent

QUESTION 5

The ozone layer:
 a. protects us from ultraviolet rays which can cause cancer and blindness.
  b. has been damaged as a result of the Montreal Protocol.
  c. has been damaged as a result of the ban on CFCs.
  d. is another term for the greenhouse effect.