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In the following, I am providing a set of statements which are either true or false. I am also providing the correct answer. If you
In the following, I am providing a set of statements which are either true or false. I am also providing the correct answer. If you agree, then explain to yourself why you agree. If you disagree, then explain why you disagree and what the explanation for the correct answers is. Explanation must be to the point and short. Submit the answers from within blackboard 1. A project is acceptable if present value of future cash flows is more than investment cost (true) 2. If interest rate goes down, quantity demand for loanable funds by will increase (true) 3. If PV - 1 0 (false) 4. If Japanese interest rate goes up and US interest rate remains unchanged, then foreign demand for US loanable funds will increase (true) 5. Real rate of interest is equal to expected inflation rate plus nominal interest rate (false) 6. According to Fisher effect, if nominal interest rate goes up by 1%, then inflation will also go up by one percent (true) 7. According to Fisher effect, if expected inflation rate goes up by 1%, then nominal interest rate will also go up by one percent (true) 8. If expected inflation rate goes up, the supply curve for loanable fund will shift to the left (true) 9. If expected inflation rate goes up, the supply curve for loanable fund will shift up (true) 10. If the public expect unemployment rate to increase, equilibrium interest rate will go down (true)
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