Which of the following statements is correct?
a. To control the money supply, the Fed relies primarily on the reserve requirement
b. The discount rate is the rate of interest banks charge to their best customers.
c. The Fed changes the reserve requirement frequently.
d. Because the Fed has no way to earn income, it is dependent upon Congress for appropriations.
e. Banks can turn a borrower's IOU into money.
e
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If the real gross domestic product (GDP) for the base year is $4 trillion, then the nominal gross domestic product (GDP) for that year is _____
a. ?$.04 trillion b. $0.4 trillion c. $4 trillion d. $40 trillion e. $400 trillion
A builder is planning to construct to a departmental store with an investment worth $1,200 . He receives proposals from two retailers interested to lease space in it assuring him future cash flows worth $1,000 at the end of the first year and $700 at the end of two years. If the building lasts only for two years and the discount rate is 15 percent, what would be the net present value of this
project? a. $300.50 b. $257.63 c. $198.67 d. $118.38