How is the concept of present value useful in deciding whether or not to undertake an investment project?
What will be an ideal response?
If the present value of the income stream associated with an investment is less than the full cost of the investment project, the investment should not be undertaken. If the present value of the income stream is greater than or equal to the full cost of the investment project, it should be undertaken.
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The demand for loanable funds curve illustrates
A) the quantity of loanable funds demanded at any given level of disposable income. B) how the quantity of loanable funds demanded changes when the people's expectations about their future income changes. C) how the quantity of loanable funds demanded changes when wealth changes. D) the quantity of loanable funds demanded at any given level of the real interest rate. E) the quantity of loanable funds supplied to the loanable funds market at any given level of disposable income.
When we compare poor and rich countries in the world
A) There is much greater dispersion in growth rates in per capita income for the poor countries than for the rich countries. B) The investment rate is higher for poor countries than for rich countries. C) There is much greater dispersion in growth rates in per capita income for the rich countries than for the poor countries. D) Population growth rates are higher in rich countries than in poor countries.