If the real interest rate is 5 percent when the inflation rate is 4 percent, the nominal interest rate is
A) 1 percent. B) 9 percent. C) 1.25 percent. D) .80 percent. E) 20 percent.
B
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In order for pollution taxes to be effective in eliminating the deadweight loss resulting from pollution, the pollution tax must be set equal to the
A) marginal private cost. B) marginal external cost. C) marginal social cost. D) marginal benefit of polluting. E) price of the good.
Which of the following is not a basic assumption underlying the theory of consumer behavior?
A) Consumers prefer more to less. B) Consumer preferences depend on the amounts of goods they consume as well as the amounts being consumed by other consumers. C) Goods are continuously divisible, that is, consumers can always purchase one more or one less unit of a good. D) Consumers have well-behaved preferences, that is, preference orderings are complete.
A decreased demand for U.S. dollars on the foreign exchange market, all else equal, will result in a depreciation of the U.S. dollar
Indicate whether the statement is true or false
Which of the following will increase the supply of a good?
a. An increase in the price of another good that producers could produce. b. A lower price paid for resources used in the production of the good. c. A decrease in the number of sellers. d. An increase in taxes paid to the government by producers.