In cost of capital calculations, the flotation cost on new debt is usually ignored because the flotation cost percentage for large debt issues is relatively low

A president of the United States promises to produce more defense goods without any decreases in the production of other goods. This promise can be valid

A) if the United States is producing at a point on its production possibilities frontier. B) if the United States is producing at a point inside its production possibilities frontier. C) if the United States is producing at a point beyond its production possibilities frontier. D) only if the production possibilities frontier shifts rightward.

Suppose that you took out a $1000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?

A) The nominal interest rate is 7.5 percent and the real interest rate is 1.5 percent. B) The nominal interest rate is 7.5 percent and the real interest rate is 13.5 percent. C) The real interest rate is 7.5 percent and the nominal interest rate is 1.5 percent. D) The real interest rate is 6 percent and the nominal interest rate is 7.5 percent.