In Fisher's model of the determination of the rate of return, the price of a "future good" is:
a. less than the price of a current good if the interest rate is negative.
b. equal to the price of a current good if the interest rate is positive.
c. greater than the price of a current good if the interest rate is positive.
d. less than the price of a current good if the interest rate is positive.
d
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When new firms are encouraged to enter a monopolistically competitive market
A) some existing firms must be earning economic profits. B) the demand curve facing an existing firm shifts to the right. C) they do so because there is insufficient product differentiation. D) the marginal cost curve facing an existing firm shifts downwards.
Assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to ________ by ________ of
the total original asset value. A) decline; 5 percent B) decline; 10 percent C) decline; 15 percent D) increase; 20 percent