The real interest rate:
a. Is always lower than the nominal interest rate.
b. Is strongly affected by expected inflation.
c. Equals the nominal interest rate plus the expected inflation.
d. Is determined by lenders solely.
e. Reflects a nation's time value of money.
.E
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Which of the following is NOT shown explicitly in the circular flow model?
A) the governments' purchases in the goods market B) the taxes the governments collect from households C) the governments' interaction with firms D) the legal system E) the transfers the governments make to households
The manager of View Your World, a high-end window manufacturer, notices that the cost to purchase glass for their windows in the spot market has increased. As a result of the change, which of the following is true?
A) The manager has more of an incentive to integrate forward. B) The manager has less of an incentive to integrate forward. C) The manager has less of an incentive to integrate backward. D) The manager has more of an incentive to integrate backward.
If a supplier faces a perfectly horizontal demand curve and sets his price slightly higher than the demand curve itself, he can expect
a. no change in his total revenues b. everyone to begin buying his product c. a complete loss of revenues d. a new demand curve e. a relative increase in income
All of the following are true for a monopsonist except
A. The demand for labor is the same as the marginal revenue product of labor. B. The derived demand for labor is downward-sloping. C. The market demand for labor is upward-sloping. D. The marginal factor cost for labor exceeds the wage rate.