Question

the interest rate is zero, a promise to receive a $200 payment two years from now M e valuable than receiving $200 today Cless valuable than receiving $200 today B Equal in value to receiving $100 today oday D. Equal in value to receiving $200 today The double coincidence of wat problem can be solved by more resources B. more production C.money . Comic growth When a waiter deposits cash tips into his savings a t M2 increases B M2 decreases CMI deseases D. dc 14 Money market mutual funds hold only portfolios of A. stocks. B. short-term assets. C. bonds D.U.S. Treasury securities 15 In comparing money to a U.S. Treasury bond held by an individual, we can say: A. both are legal tender C. both are units of account D both are stores of value. B only the bond is legal tender since it is issued by the government 16 The M2 definition of the money supply is smaller than the MI definition of the money supply B. includes everything in M plus assets that are slightly more liquid than those included in MI C. includes everything in M plus assets that are slightly less liquid than those included in M D. includes everything in Ml plus credit card balances 17. Economists define liquidity as the A difference between the return on the asset and the return on a long-term U.S. Treasury bond B. fraction the asset makes up of an investor's portfolio. C. ease with which an asset can be converted into money. D. difference between the total demand for an asset and the total supply of the asset 18. Whatever a society uses as money, the distinguishing characteristic is that A. it must be completely inflation proof B. must be generally acceptable as a payment for goods and services C. it must contain gold D. it must be issued by the government டுரு 19. When money prices are used to facilitate the comparisons of value, money is said to function as A. a unit of account C. a medium of exchange B. a store of value D. a payments system ruler DOO 20. The organization responsible for carrying out monetary policy in the United States is the A. U.S. Treasury B. Federal Reserve System C. Comptroller of the Currency D. all of the preceding C. Wealth is a flow variable D. A and Care both true 21. Which of the following statements is true? A Wealth increases when consumption exceeds income B. Wealth increases when income exceeds consumption cor 320

Answer 1

For question 11 -

Statement - If the interest rate is zero, a promise to receive a $200 payment two years from now is:

Answer - D. Equal in value to receiving $200 today

Explanation - In the case of the interest rate being zero, the borrower has to return only the principle amount and no additional sum incurred due to the interest rate. Hence, the payment after two years will be equal in value to one which would be received today.