What potential conflict exists between attracting foreign capital and policies aimed at economic recovery?
What will be an ideal response?
Key role of interest rates. To attract foreign capital - especially during economic uncertainties - requires higher interest rates, but high rates could deter investment and slow recovery.
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Suppose you hit a progressive jackpot on a 25-cent Fortunemaker slot machine in a casino in Las Vegas and are given the choice of the following prizes:
Prize 1: $200,000 to be received right away, with four additional payments of $200,000 to be received each year for the next four years. Prize 2: $750,000 to be received right away. If the interest rate is 3 percent, what is the present value of each prize?
Part of the effect of higher interest rates on residential construction is through
A) inflationary expectations. B) credit rationing. C) the expected value of the homes to the buyers. D) the income effect.