If inflation is expected by both borrowers and lenders, then we would expect
A. real rates to be higher than nominal rates of interest.
B. real rates to be equal to nominal rates of interest.
C. real rates to be lower than nominal rates of interest.
D. nominal rates of interest to be less than the expected inflation rate.
Answer: C
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If consumption was 70 percent of GDP and investment and government expenditure were both 18 percent each, then we see that
A) exports must be less than imports. B) exports must be more than imports. C) the error is due to rounding. D) we must subtract depreciation from investment so that the components of GDP do not exceed 100 percent. E) GDP can be over 100 percent because it is "gross" rather than "net."
Refer to Table 1-4. What is Eva's marginal benefit if she decides to stay open for two hours instead of one hour?
A) $25 B) $36 C) $60 D) $95
If the government increases the income tax rate they likely intend for:
A. C to decrease, shifting aggregate demand to the left. B. C to increase, shifting aggregate demand to the right. C. I to increase, shifting aggregate demand to the right. D. G to increase, shifting aggregate demand to the right.
On a bowed production possibilities frontier, as you move down along the curve
a. more of one good must be given up to receive one unit of the other good. b. the available production technology does not change. c. the opportunity cost increases. d. All of the above are correct.