Question 1

Henry George's single-tax movement was based on the argument that:

Accepted Answer

A)   the tax structure should consist solely of a highly progressive tax on nonwage incomes.
B)   interest is unearned income and should be taxed away by government.
C)   in less developed countries the supply of and demand for land will be such that land will be a free good and therefore capable of bearing sizable taxes.
D)   a high tax on land rent is justified because land rent performs no incentive function.E) C) and D)
F) All of the above

Question 2

Effective usury laws cause:

Accepted Answer

A)   a surplus in the market for loanable funds.
B)   the quantity of loanable funds demanded to be brought into balance with the quantity supplied.
C)   the quantity of loanable funds demanded to exceed the quantity supplied.
D)   the quantity of loanable funds supplied to exceed the quantity demanded.E) C) and D)
F) B) and C)

Question 3

(Last Word) Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425) .The interest rate on this loan is about:

Accepted Answer

A)   12.5 percent.
B)   14.5 percent.
C)   17.6 percent.
D)   10 percent.E) B) and C)
F) A) and B)

Question 4

Pure or economic profit is:

Accepted Answer

A)   the amount by which accounting profits exceed normal profits.
B)   determined by subtracting explicit costs from total revenue.
C)   the return required to retain entrepreneurial talent in some particular line of production.
D)   the return to any resource the supply of which is perfectly inelastic.E) C) and D)
F) All of the above

Question 5

The "future value" of a sum of money refers to:

Accepted Answer

A)   the estimated value of that money invested in a stock portfolio at some future date.
B)   the purchasing power of a given amount of money adjusted for price changes.
C)   today's value of a sum of money to be received in the future.
D)   the amount to which some current sum of money will grow over time.E) B) and C)
F) A) and B)

Question 6

(Last Word) Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

Accepted Answer

A)   10 percent.
B)   15 percent.
C)   12.5 percent.
D)   7.5 percent.E) C) and D)
F) A) and C)

Question 7

The equilibrium interest rate:

Accepted Answer

A)   affects both the size of total output and its composition.
B)   falls when the demand for loanable funds increases.
C)   determines the composition of R&D spending but not its total amount.
D)   increases when the expected rate of return on R&D spending falls.E) A) and D)
F) A) and C)

Question 8

Usury laws:

Accepted Answer

A)   allocate funds from low-productivity to high-productivity investments.
B)   establish a legal ceiling on interest rates.
C)   make more funds available to low-income borrowers.
D)   create a surplus of loanable funds.E) A) and D)
F) B) and C)

Question 9

Which of the following is not a source of loanable funds?

Accepted Answer

A)   The saving of households.
B)   Business saving.
C)   Commercial bank lending.
D)   Government budget deficits.E) A) and C)
F) All of the above

Question 10

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Accepted Answer

A) True 
 B)False

Question 11

In making an investment decision,a business firm is most interested in the:

Accepted Answer

A)   nominal interest rate.
B)   real interest rate.
C)   nominal interest rate minus the real interest rate.
D)   the future supply of loanable funds.E) A) and B)
F) A) and C)

Question 12

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later) ?

Accepted Answer

A)   $5,750.
B)   $5,788.
C)   $5,813.
D)   $5,825.E) None of the above
F) A) and D)

Question 13

Different rents on land reflect differences in the marginal revenue product of land.

Accepted Answer

A) True 
 B)False

Exam 17: Rent Interest and Profit

(Last Word) Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

Correct Answer
verified

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Correct Answer
verified

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later) ?

Correct Answer
verified

Effective usury laws cause:

Correct Answer
verified

The "future value" of a sum of money refers to:

Correct Answer
verified

Henry George's single-tax movement was based on the argument that:

Correct Answer
verified

The equilibrium interest rate:

Correct Answer
verified

(Last Word) Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425) .The interest rate on this loan is about:

Correct Answer
verified

Which of the following is not a source of loanable funds?

Correct Answer
verified

Usury laws:

Correct Answer
verified

In making an investment decision,a business firm is most interested in the:

Correct Answer
verified

Different rents on land reflect differences in the marginal revenue product of land.

Correct Answer
verified

Pure or economic profit is:

Correct Answer
verified

Exam 17: Rent Interest and Profit

(Last Word) Suppose you borrow $500 and agree to pay this $500 plus $75 of interest at the end of a year.The interest rate is:

Correct AnswerverifiedShow Answer

Other things equal,the shorter the loan period and the larger the loan size,the higher is the interest rate charged by the lender.

Correct AnswerverifiedShow Answer

On January 1,2010,Alex deposited $5,000 into a savings account that pays interest of 5 percent,compounded annually.If he makes no further deposits or withdrawals,how much will Alex have in his account on December 31,2012 (3 years later) ?

Correct AnswerverifiedShow Answer

Effective usury laws cause:

Correct AnswerverifiedShow Answer

The "future value" of a sum of money refers to:

Correct AnswerverifiedShow Answer

Henry George's single-tax movement was based on the argument that:

Correct AnswerverifiedShow Answer

The equilibrium interest rate:

Correct AnswerverifiedShow Answer

(Last Word) Suppose you borrow $500 for a year and the lender discounts $75 of interest at the time the loan is made (giving the borrower only $425) .The interest rate on this loan is about:

Correct AnswerverifiedShow Answer

Which of the following is not a source of loanable funds?

Correct AnswerverifiedShow Answer

Usury laws:

Correct AnswerverifiedShow Answer

In making an investment decision,a business firm is most interested in the:

Correct AnswerverifiedShow Answer

Different rents on land reflect differences in the marginal revenue product of land.

Correct AnswerverifiedShow Answer

Pure or economic profit is:

Correct AnswerverifiedShow Answer

Correct Answer
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