Suppose the interest rate is 8 percent. Consider three payment options: 1 . $200 today. 2 . $220 one year from today. 3 . $240 two years from today. Which of the following is correct?
a. Option 1 has the highest present value and Option 2 has the lowest.
b. Option 2 has the highest present value and Option 3 has the lowest.
c. Option 3 has the highest present value and Option 1 has the lowest.
d. None of the above is correct.
c
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In light of higher gas prices, Skip Miles asks himself if it's worth keeping his 10 cylinder Chevy Suburban. His concern is ultimately about
A) engineering efficiency. B) economic efficiency. C) technical efficiency. D) environmental efficiency.
In the Keynesian framework, as long as output is below the equilibrium level, unplanned inventory investment will remain negative, firms will continue to ________ production, and output will continue to ________
A) lower; fall B) lower; rise C) raise; fall D) raise; rise