Which of the following increases the real interest rate?
A. a decrease in both the nominal interest rate and the inflation rate by the same percentage points
B. a decrease in the nominal interest rate, holding the inflation rate constant
C. an increase in both the nominal interest rate and the inflation rate by the same percentage points
D. a decrease in the inflation rate, holding the nominal interest rate constant
Answer: D
You might also like to view...
The slope of a curved line can be approximated by
A) the average of the variable measured along the y-axis divided by the average of the variable measured along the x-axis. B) the inverse of the straight-line method. C) the average of the variable measured along the x-axis divided by the average of the variable measured along the y-axis. D) the slope across an arc from one point on the curve to another point on the curve.
Corporations, like individuals, face an alternative minimum tax (AMT).
A. True B. False C. Uncertain
If the expected inflation rate rises from 3% to 5% when the nominal interest rate is 4%, the Fisher effect asserts that the nominal interest rate would
A) not change. B) rise to 6%. C) fall to 2%. D) fall to 3%.
The vertical axis of the aggregate demand and aggregate supply graph has the
a) output of goods. b) output of services. c) real GDP. d) the price level.