As shown in Table 16.2, $1,000 invested at 10 percent compound interest will grow into $1,331 after three years. What is the present value of $2,662 in three years if it is discounted back to the present at a 10 percent compound interest rate? (Hint: $2,662 is twice as much as $1,331.)
6. Entrepreneurs are the residual claimants at their respective firms. This means that they:
a. Only get paid if there is any money left over after all the other factors of production have been paid.
b. Must bear the financial risks of running their firms.
c. Receive whatever accounting profits or losses their firms generate.
d. All of the above.
7. True or false. As a capitalist economy, the vast majority of U.S. national income flows to the owners of capital.
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