The risk adjusted discount rate
A) is the sum of the risk-free rate and the risk premium.
B) includes risk in the denominator of the present value calculation.
C) includes risk in the numerator of the present value calculation.
D) All of the above
D
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Which of the following is a microeconomic question?
A) Should Congress and the president take action to reduce the unemployment rate? B) Why do some countries have higher economic growth rates than other countries? C) Should companies pay for employees' health insurance? D) Should the Fed attempt to influence the interest rate to control potential inflation?
Suppose the measured unemployment rate is 3.9% and the natural rate of unemployment is 5.1%. In this situation, policymakers should
A) attempt to stimulate the economy. B) attempt to slow the economy. C) not intervene in the economy. D) The actions of policymakers will depend on how much of the natural rate is frictional unemployment and how much is structural unemployment.