The interest rate thought to have the most important impact on aggregate demand is the
A) short-term interest rate.
B) T-bill rate.
C) rate on 90-day CDs.
D) long-term interest rate.
D
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Suppose the nominal annual interest rate on a 2-year loan is 8% and lenders expect inflation to be 5% in each of the two years. The annual real rate of interest is
A. 3%. B. 6%. C. 8%. D. 2%.
A landlord requiring potential tenants to provide a rental history is an example of:
A. screening. B. signaling. C. statistical discrimination. D. building a reputation.
The minimum efficient scale for a firm is the
a. lowest rate of output at which long-run average cost is at a minimum b. lowest rate of output at which short-run average total cost is at a minimum c. lowest rate of output at which short-run average variable cost is at a minimum d. average of the rates of output at which long-run average cost is at a minimum e. average of the rates of output at which short-run average total cost is at a minimum
When compared to a closed shop, a union shop provides the hiring firm with
a. more skilled labor b. more flexibility in exercising its right to choose its own labor c. less flexibility in exercising its right to choose its own labor d. less skilled labor e. labor at a higher wage rate