For this question, assume that expected inflation is zero. In this situation, we know that
A) the nominal and real interest rates are equal.
B) the nominal interest rate will exceed the real interest rate.
C) the real interest rate will exceed the nominal interest rate.
D) the real interest will be zero.
E) the real interest rate is negative.
A
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A difference in wages that arises to offset the nonmonetary characteristics of different jobs is known as
a. a compensating differential. b. an inefficiency wage. c. the equilibrium difference. d. a union wage.
The problem with applying monetary policy to the housing bubble affiliated with the recession of 2007–2008 was that the bubble was recognized______.
a. too late to take action b. so far in advance that the actions taken were excessive c. in time, but no action was taken d. in time, but underestimated
Which of the following government functions most clearly prevents rent-seeking behavior from leading to a socially inefficient Nash equilibrium?
a) provision of national defense b) operation of Social Security c) provision of public education d) issuance of patents e) establishing municipal rent control on urban apartments
Macroeconomics is best defined by which of the following statements?
A. Macroeconomics is the study of how the prices of individual goods are determined. B. Macroeconomics is the study of the behavior of the economy as a whole. C. Macroeconomics is the study of individual households. D. Macroeconomics is the study of how firms attempt to maximize profits.