If the nominal rate of interest is 12 percent and the real rate of interest is 3 percent, then the expected rate of inflation is
A. 18%.
B. 15%.
C. 12%.
D. 9%.
D. 9%.
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Suppose prices are quoted in dollars and transactions are conducted in pesos. The peso serves as a
A) medium of exchange. B) store of value. C) unit of account. D) all of the above.
The law of diminishing marginal returns says that as additional units of a variable input are added to
a. fixed amounts of other inputs, total output will eventually remain constant b. varying amounts of other inputs, total output will eventually decline c. fixed amounts of other inputs, the resulting increases in total output will eventually become smaller d. varying amount of other inputs, the resulting increases in total output will eventually become smaller e. a declining amount of output, technology will eventually deteriorate
A clinic uses doctors and nurses optimally and is servicing the maximum number of patients given a limited annual payroll. The last doctor hired treated 1,600 extra patients in a year, while the last nurse hired treated 1,000 extra patients in a year. If doctors make $80,000 a year and nurses make $40,000 a year, then
A. the clinic is making the correct decision because doctors are more productive than nurses. B. the clinic could serve more patients by hiring fewer doctors and more nurses. C. the clinic could serve more patients by hiring more doctors and fewer nurses. D. the clinic is not making the correct decision because the additional patients per dollar spent on doctors is greater than the additional patients per dollar spent on nurses. E. both a and d.
How is economic growth shown by the production possibilities curve?
A) by shifting the curve to the right B) by moving the curve to the left C) by moving up the existing curve D) by changing the shape of the curve from a straight line to one that is bowed