Assume the long-term real interest rate is 4% and the expected inflation rate is 5%
If the Fed decreases the money supply and as a result, the expected inflation rate decreases to 2%, then based on the Fisher effect, the long-term real interest rate will ________ and the long-term nominal interest rate will ________. A) fall to 4%; rise to 7%
B) remain at 4%; fall to 6%
C) fall to 1%; fall to 6%
D) fall to 6%; remain at -1%
B
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If a country has attracted a relatively large number of foreign workers and a large amount of foreign investment,
a. national income will generally exceed gross national product. b. gross national product will generally exceed gross domestic product. c. net domestic product will generally exceed gross domestic product. d. gross domestic product will generally exceed gross national product.
Evaluate the economic validity of the following statement: "Unemployed resources would not exist if the economy were operating efficiently."
When Jamar has an income of $2,000 . he consumes 30 units of good A and 50 units of good B. After Jamar's income decreases to $1,500, he consumes 33 units of good A and 45 units of good B. Which of the following statements is correct?
a. Both goods A and B are normal goods. b. Both goods A and B are inferior goods. c. Good A is a normal good, and good B is an inferior good. d. Good A is an inferior good, and good B is a normal good.
If the United States and Mexico trade Budweiser for Modelo beer, what type of trade does this represent?
What will be an ideal response?