You put money into an account and earn a real interest rate of 6 percent. Inflation is 3 percent, and your marginal tax rate is 20 percent. What is your after-tax real rate of interest?
a. 4.8 percent
b. 5.4 percent
c. 7.2 percent
d. 4.2 percent.
d
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Refer to Figure 4.9. Payoffs for playing Solid and Dash are indicated by the appropriate lines in the figure. Answer the following questions based on the above figure:
a. If you were playing this game, what would you choose if you thought everyone was playing Solid? b. If you were playing this game, what would you choose if you thought everyone was playing Dash? c. What is the dominant strategy in this game? d. What is the equilibrium outcome in this game?
When automatic fiscal stabilizers are in place, a shock that causes a fall in the level of economic activity automatically
a. results in a decline in the federal budget deficit that lessens the fall in income. b. results in a rise in the federal deficit that lessens the fall in income. c. requires the federal government to balance the budget. d. will lead to a permanent increase in the budget deficit. e. both a and b
A perfectly competitive market is one in which:
A. fully informed, price-taking buyers and sellers easily trade a standardized good or service. B. fully informed, price-making buyers and seller easily trade a standardized good or service. C. uninformed, price-taking buyers and sellers easily trade a standardized good or service. D. uninformed, price-making buyers and seller easily trade a standardized good or service.
The opportunity cost of production differs from an accounting definition of a firm's costs because it includes
a. expenditures the firm undertakes for research and development. b. the opportunity cost of assets and financial resources owned by the firm. c. the direct monetary cost of purchasing resources. d. the firm's revenue as a cost.