In a circular flow diagram,
i. the value of production = income.
ii. the value of production = expenditure.
iii. expenditure = income.
A) i and ii are true statements.
B) i and iii are true statements.
C) Only iii is a true statement.
D) Only i is a true statement.
E) i, ii and iii are true statements.
E
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An open market purchase immediately impacts the banking system balance sheet by
a. increasing required reserves. b. increasing deposits. c. increasing the money multiplier. d. increasing excess reserves. e. none of the above.
According to the Net Present Value (NPV) rule, managers choose to invest if
a. The NPV of the project is less than zero b. The NPV of the project is greater than zero c. The NPV of the project is equal to zero d. The NPV of the project is equal to the cost of capital