Economists Speaking Like Scientists Make

question 2

Multiple Choice

Economists speaking like scientists make

• A)normative statements.
• B)prescriptive statements.
• C)claims about how the world is.
• D)claims about how the world should be.

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Definitions:

Effective Rate

The effective rate, also known as the annual equivalent rate, is the interest rate on an investment or loan that accounts for the effects of compounding over a given period.

APR

Annual Percentage Rate, which is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, credit card, etc.

Rate Of Return

The appreciation or depreciation of an investment over a set period, quantified as a percentage of the investment's starting value.

Cash Flows

The net amount of cash being transferred into and out of a business, reflecting operational, investing, and financial activities.