In an open economy with floating exchange rates, monetary policy is most effective at increasing real income if

At a discount rate of 6 percent, what is the net present value of an investment project expected to yield $1,000 per year (to be received at year end) for the next three years?

a. $3,000 b. $2,829 c. $2,673 d. There is insufficient information to determine whether the project should be undertaken.

A federal law is enacted that mainly benefits one political district, but the costs of this legislation will be spread over the entire country. Which of the following terms describes this situation?

a. Logrolling b. Rational ignorance c. Pork-barrel spending d. Political correctness