In evaluating public projects, a higher interest rate (r) will favor those projects which
a. have costs and benefits occurring in the more distant future.
b. have costs and benefits occurring in the more immediate future.
c. have benefits occurring in the more immediate future and costs occurring in the more distant future.
d. have benefits occurring in the more distant future and costs occurring in the more immediate future.
c
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If policy makers think the natural rate of unemployment is lower than it really is, then their policies designed to move the economy to the estimated natural rate, if continued over the long run, will: a. cause continuing inflation
b. shift the long-run aggregate supply curve to the right. c. shift the supply curve of labor to the right. d. lead to a lower price level. e. keep the economy below its potential GDP level.
If a bank has deposits of $250 million, reserves that total $30 million and has a required reserve rate of 10 percent:
A. the bank is short of required reserves. B. the bank has excess reserves of $3 million. C. the bank has excess reserves of $27.5 million. D. the bank has excess reserves of $5 million.