You win the $20 million state lottery, and you have a choice of taking an amount of money per year for the next 20 years or a flat payment now. The flat payment that the state offers you is $9.82 million
a. What discount rate is the state using?
b. Should you take the money or the annuity?
a. 8% (This is essentially the internal rate of return on the project.)
b. In general, it depends on what return you think you can get on the money. If you think you can do better than 8%, you're better off with the cash.
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Which of the following is true regarding the measurement of GDP?
A) Wages and profit income are used in the income approach to GDP. B) Wages and consumption are used in the expenditure approach to GDP. C) Consumption and investment are used in the income approach to GDP. D) Government expenditure is only counted in the income approach to GDP. E) Investment and wages are expenditures, and are therefore are used in the expenditure approach to GDP.
A researcher wants to test the effects of daily meditation on stress levels of individuals. She divides the participants randomly into a treatment group and into a control group and conducts an experiment
She pays for meditation classes for one-half of the subjects, and the other half does not join the class. Which of the following statements is true of the two groups in this experiment? A) The participants in the treatment group are assigned by chance, whereas the ones in the control group are assigned by choice. B) The participants in the control group are assigned by chance, whereas the participants in the treatment group are assigned by choice. C) The treatment group is the group of subjects that receives finance from the researcher for meditation classes; the control group is the group that does not. D) The control group is the group of subjects that receives finance from the researcher to join the meditation class; the treatment group is the group that does not.