This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Investment demand is downward sloping because A) an increase in investment demand causes interest ... (Read 92 times)

mspears3

  • Hero Member
  • *****
  • Posts: 586
on: Jul 1, 2018
Investment demand is downward sloping because
 
  A) an increase in investment demand causes interest rates to fall.
  B) at lower interest rates, firms will undertake more investment.
  C) at lower interest rates, firms will undertake less investment.
  D) None of the above.

Question 2

Suppose coal sells for 50 per ton and can be mined at a constant marginal cost of 20 per ton. Forecasters predict that the price of coal next year will be 55. If your marginal cost next year will still be 20 and the interest rate is 10, do you sell coal today?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

marict

  • Sr. Member
  • ****
  • Posts: 304
Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

You are indifferent if coal prices rise (10 of 50 - 20 ) by 3. Since coal prices are expected to rise by 5, you will wait until next year.


mspears3

  • Hero Member
  • *****
  • Posts: 586
Reply #2 on: Jul 1, 2018
Correct answers!


marict

  • Sr. Member
  • ****
  • Posts: 304
Reply #3 on: Jul 1, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

Women are two-thirds more likely than men to develop irritable bowel syndrome. This may be attributable to hormonal changes related to their menstrual cycles.

Did you know?

In the United States, an estimated 50 million unnecessary antibiotics are prescribed for viral respiratory infections.

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

Did you know?

Amoebae are the simplest type of protozoans, and are characterized by a feeding and dividing trophozoite stage that moves by temporary extensions called pseudopodia or false feet.

An investment versus a bill An investment versus a bill
Mean scores for Erikson’s stage V (Identity) for two cohorts. Scores for both cohorts increase ... Mean scores for Erikson’s stage V (Identity) for two cohorts. Scores for both cohorts increase ...
Steel-toed shoes are a worthwhile investment to help prevent foot injury due to falling objects. ... Steel-toed shoes are a worthwhile investment to help prevent foot injury due to falling objects. ...
Growing Interest in Sugar-Free Foods and Beverages Growing Interest in Sugar-Free Foods and Beverages
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
A promissory note for $600.OO dated January 15, 2017. requires an interest payment of $120 00 ... A promissory note for $600.OO dated January 15, 2017. requires an interest payment of $120 00 ...
Video: Chemical Equilibrium between N2O4 (colorless gas) and NO2 (brown gas)

For a complete list of videos, visit our video library