If the nominal interest rate is 5 percent and there is no inflation, _____
a. the real interest rate exceeds 5 percent
b. the real interest rate is less than 5 percent
c. the real interest rate is 5 percent
d. there is not enough information to determine the real interest rate
e. the real interest rate is zero
c
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A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25 . In the short run, the firm should
a. Shut-down as the firm is making a loss of $10,000 per week b. Shut-down as price is lower than average cost c. Continue operating as the firm is covering all the variable costs and some of the fixed costs d. Shut-down because it is cost effective to pay off the remaining fixed costs
The consumer price index was 225 in 2008 and 232.2 in 2009 . The nominal interest rate during this period was 6.5 percent. What was the real interest rate during this period?
a. 1.6 percent b. 3.3 percent c. 5.1 percent d. 7.4 percent
The specificfactors model assumes that in each industry (such as manufacturing and agriculture) there are factors of production that are:
a. less productive. b. outsourced to other nations. c. fixed or immobile. d. very scarce and therefore have a high supply price.
As economies are predictable, economic risk presents executives with very few challenges.
Indicate whether the statement is true or false.