The opportunity cost of holding money instead of an interest earning asset is the
A) inflation rate minus the real interest rate.
B) inflation rate.
C) real interest rate.
D) nominal interest rate.
E) inflation rate minus the nominal interest rate.
D
You might also like to view...
Mr. Johnson earns $100,000 per year. Each year he spends $70,000 and saves $30,000. He pays 5 percent sales tax on all his spending. Assuming this is only tax he pays, his average tax rate out of his income is:
a) 5.0 percent b) 1.5 percent c) 3.5 percent d) 2.5 percent
You are the brand manager of Crest toothpaste and you observe that when you increase the price of Crest, your total revenue increases. How is that possible?
What will be an ideal response?
If the quality of items improves over time, the CPI ________ inflation
a. overstates b. understates c. equals d. approximates
If the consumer gets 40 utils from consuming four CDs, 45 utils from consuming five CDs, and 48 utils from consuming six CDs, then the consumer's marginal utility from the sixth CD is:
A. 3 utils. B. 8 utils. C. 46.5 utils. D. 48 utils.