A US pharmaceutical company has claimed for years that their medication would cure headaches, but they were lying the entire time. The medication was nothing more than candy that they sold as medicine so they could make a high profit. What should happen to this company and why? Nothing; a company in a capitalist economy can say whatever they want as long as they make a profit. Nothing; it is the consumer’s responsibility to figure out if a product is living up to its claim and stop buying it. A punishment; unfair practices and false claims are not tolerated under government supervision. A punishment; the United States. has a laissez-faire economy except for pharmaceutical companies, which is the only market that is strictly regulated.

For each example identify the most appropriate ctso

Assume that the following conditions exist: a. all banks are fully loaned up- there are no excess reserves, and desired excess reserves are always zero. b. the money multiplier is 5 .     c. the planned investment schedule is such that at a 4 percent rate of interest, investment =$1450 billion. at 5 percent, investment is $1420 billion. d. the investment multiplier is 3 . e.. the initial equilibrium level of real gdp is $12 trillion. f. the equilibrium rate of interest is 4 percent now the fed engages in contractionary monetary policy. it sells $1 billion worth of bonds, which reduces the money supply, which in turn raises the market rate of interest by 1 percentage point. calculate the decrease in money supply after fed's sale of bonds: $nothing billion.

Lambert manufacturing has $100,000 to invest in either project a or project b. the following data are available on these projects (ignore income taxes.): project a project b cost of equipment needed now $100,000 $60,000 working capital investment needed now - $40,000 annual cash operating inflows $40,000 $35,000 salvage value of equipment in 6 years $10,000 - both projects will have a useful life of 6 years and the total cost approach to net present value analysis. at the end of 6 years, the working capital investment will be released for use elsewhere. lambert's required rate of return is 14%. the net present value of project b is: