Dean Should Play Golf Instead of Preparing for Tomorrow's Exam

question 55

Multiple Choice

Dean should play golf instead of preparing for tomorrow's exam in economics if:

• A)he is irrational.
• B)the benefit of golfing is greater than the benefit of studying.
• C)the economic surplus from playing golf is greater than the economic surplus from studying.
• D)Dean can play golf for free.

Understand the role and limitations of intelligence testing, including cultural biases.

Understand the fundamentals of dividend growth models.

Apply the dividend growth model to calculate the value of a stock.

Calculate and interpret the required rate of return on a stock.

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Definitions:

Reserve Requirement Ratio

The fraction of deposits that banks are required to hold in reserve, either in their vaults or with the central bank, not used for loans.

Checkable Deposits

Deposits in bank accounts that can be withdrawn using checks, debit cards, or digital transactions, comprising a significant part of the money supply.

Required Reserves

are the minimum amounts of funds that banks must hold in reserve against deposits, as mandated by central banks.

Federal Funds Target Rate

The interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight, guided by the Federal Reserve.