Which of the following statements is correct?
A. For a given nominal interest rate, the real interest will decrease if inflation decreases.
B. For a given expected inflation rate, the nominal interest must increase if real interest decreases.
C. For a given real interest rate, the nominal interest must increase if expected inflation increases.
D. For a given real interest rate, the nominal interest must decrease if expected inflation increases.
Answer: C
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The GDP figures fail to count labor services and other household production. Once this omission is taken into account,
What will be an ideal response?
Figure 3.5 illustrates the supply of tacos. A technological advancement which makes tacos cheaper to produce would most likely cause a movement from:
A. point a to point c. B. point c to point a. C. S2 to S0. D. S0 to S2.
Suppose that the maximum price for rent in New York City is set above the equilibrium price. Which of the following statements is incorrect?
A. It reduces the quantity supplied. B. It increases the quantity demanded. C. Consumers want to buy more than producers want to sell. D. All of these are incorrect.
A period of expansion in the business cycle ends when
A) real GDP is equal to potential GDP. B) the business cycle reaches its peak. C) the business cycle reaches its trough. D) real GDP is less than potential GDP.