The CPI was 120 in 2000 and 132 in 2001. Dorgan borrowed money in 2000 and repaid the loan in 2001. If the nominal interest rate on the loan was 12 percent, then the real interest rate was
a. 2 percent.
b. 10 percent.
c. 12 percent.
d. 22 percent.
a. 2 percent.
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When the U.S. government runs a deficit, the savings in the market for loanable funds shifts:
A. left, increasing interest rates and decreasing domestic investment and NCO. B. left, decreasing interest rates and increasing domestic investment and NCO. C. right, decreasing interest rates and increasing domestic investment and NCO. D. right, increasing interest rates, and increasing domestic investment and NCO.
An advantage of public works over transfer payments as a means of reducing unemployment is that
a. public works provide more direct aid to those suffering most from unemployment. b. transfer payments are unlikely to decrease unintended excess inventories of consumer goods. c. public works require using a large amount of capital goods and producing a large amount of supplies. d. All of these.
Total fixed cost
a. increases as output increases. b. declines as output increases. c. is always zero. d. remains constant even if the firm shuts down.
An expansionary monetary policy will
a. increase imports. b. decrease exports. c. increase a current account deficit. d. decrease a capital account surplus.