Question : The internal rate of return:

Option 1: must be less than the investment rate if the firm is to invest.

Option 2: make the present value of profit equal to the present value of costs.

Option 3: falls as the annual yield of an investment rises.

Option 4: is equal to the market interest rate for all the firm's investments.

Question : The Psychological Law of Consumption states that

Option 1: proportionate increase in consumption is less than a proportionate increase in income.

Option 2: increase in income is equal to an increase in consumption.

Option 3: increase in consumption is greater than the increase in income.

Option 4: consumption does not change with a change in income.

Question : A sudden decrease in the birth rate would cause _______.

Option 1: increase in per capita income

Option 2: increase in investment

Option 3: increase in savings

Option 4: increase in loan requests

Question : When the general interest rate reaches a low level, which of the following statements will be correct?

Option 1: Most people will expect the interest rate to rise in the future.

Option 2: Most people will prefer to hold bonds.

Option 3: Most people will speculate a further decline in the rate of interest.

Option 4: Any increase in the money supply will cause the interest rate to fall further.

Question : The equilibrium of a firm under perfect competition will be determined when:

Option 1: Marginal Revenue > Average cost

Option 2: Marginal Revenue > Average Revenue

Option 3: Marginal Revenue = Marginal cost

Option 4: Marginal cost > Average cost