A financial institution that wants a 5 percent real return on its loans and contemplates a 4 percent annual inflation rate should loan at a nominal interest rate of approximately
A) minus 1 percent.
B) 1 percent.
C) 9 percent.
D) 15 percent.
E) 20 percent.
C
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Refer to Figure 18.3. In autarky, the maximum amount of pogo sticks that Livonia can produce is
A) 120. B) 100. C) 80. D) 40.
The trade-creation effect refers to:
a. the outcome of a preferential trade agreement that reduces economic efficiency by shifting production to a higher-cost producer. b. the effect of an increase in the quantity of imports relative to the effect of a tariff applicable to all imports. c. the outcome of a preferential trade agreement that allows a country to obtain goods at a lower cost than is available at home. d. the effect of a diversion of production to a country that has comparative advantage due to a free trade agreement. e. the effect of a decrease in the quantity of exports relative to the effect of a subsidy applicable to all exports.
The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector
a. increase; increase. b. increase; decrease. c. decrease; increase. d. decrease; decrease.
Expansionary fiscal policy will result in a ____ price level and ____ employment in the short run.
a. higher; higher. b. higher; lower c. lower; higher. d. lower; lower.