Suppose you can invest in a 4-year deposit with annual compounding. The deposit offers an annual interest rate of 12% during the first year and an annual interest rate of
1% during the last three years. What will be the AER of this 4-year deposit?
a. 3.64%
b. 3.75%
c. 6.36%
d. 6.50%

How will firms solve the problem of an economic surplus a. decrease prices to the market equilibrium price b. decrease prices so they are below the market equilibrium price c.increase prices

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.

3. describe the purpose of the sec. (1-4 sentences. 2.0 points)