Using a discount rate above the market interest rate to evaluate projects will
a. bias a decision toward going ahead with the project
b. correct for distortions in capital markets
c. have no impact on project evaluation
d. bias a decision toward rejecting a project
e. none of the above
D
Economics
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Suppose money supply (M) = $500, real GDP (Y) = $1,000, and nominal GDP = $5,000. Calculate the value of velocity and the price level.
A) V=2;P=1 B) V=4;P=5 C) V=10;P=5 D) V=10;P=1
Economics
Insurance companies charge a lower premium to drivers who carry a higher deductible because
A) insurance companies are not profit maximizers. B) a driver's riskiness decreases as the driver's deductible increases. C) a high deductible signals a high risk. D) insurance companies prefer that drivers carry no deductible.
Economics