Which of the following would cause the real interest rate to be negative?
a. When the nominal interest rate is greater than the inflation rate
b. When the nominal interest rate is greater than the rate of deflation
c. When the nominal interest rate is smaller than the rate of deflation
d. When the nominal interest rate is smaller than the inflation rate
e. When the nominal interest rate is equal to the inflation rate
D
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Paint and paintbrushes are complements. If the price of paint increases, then
A) the demand for paintbrushes will increase. B) the demand for paintbrushes will decrease. C) the demand for paint will increase. D) the demand for paint will decrease.
The steeper an isoquant is,
A) the greater is the marginal productivity of labor relative to that of capital. B) the greater is the substitutability between capital and labor. C) the greater is the need to keep capital and labor in fixed proportions. D) the greater is the level of output.
The labor supply curve will be positively sloped if the substitution effect of wages is
A. Negative. B. Weaker than the income effect of wages. C. Stronger than the income effect of wages. D. Equal to the income effect of wages.
Investment includes all of the following EXCEPT:
A.) The production of new factories. B.) The purchase of new machinery and equipment. C.) Money in a retirement fund. D.) Business inventories.