Suppose that you took out a $1000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?
What will be an ideal response?
The nominal interest rate is 7.5 percent and the real interest rate is 1.5 percent.
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Ensuring that high-quality public education is freely available to all children is one of the most important ways that a country can:
A. increase its stock of human capital. B. decrease its stock of human capital. C. decrease its productivity. D. increase its foreign direct investment.
Approximately what percentage is any initial movement in the level of output offset by automatic stabilizers?
a. 10 percent b. 15 percent c. 20 percent d. 25 percent
Should the government wish to lower the price of gasoline to the consumer, one approach might be
A. to take action to shift the supply curve of gasoline to the left. B. to reduce the gasoline excise tax. C. to raise the gasoline excise tax. D. to lower taxes on automobiles.
If the budget line shifts from BB to bb in the diagram, we can infer that the:
A. price of Y has increased and the price of X has decreased.
B. price of Y has decreased and the price of X has increased.
C. prices of both X and Y have increased.
D. prices of both X and Y have decreased.