Caroline has saved $100,000 for her retirement. She earned 4 percent interest on that money during the year 2013. If the inflation rate was 1 percent in 2013, what was Caroline's real interest rate?
A) $4,000 B) 5 percent C) 1 percent D) 4 percent E) 3 percent
E
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Refer to the scenario above. Thomas's arc elasticity of demand for wine is:
A) -0.33. B) -0.67. C) -0.25. D) -1.
Which of the following terms identifies something that macroeconomists would study but that microeconomists would NOT?
A) incentives B) resources C) rationality D) aggregates
Which of the following would be included in the gross domestic product (GDP)?
a. The monthly telephone bill paid by Mr. Jones b. The corporate stock purchased by Steven c. The used limousine purchased by Harold d. The bricks purchased by a construction company to build a house e. The $300 George saved because he painted his own garage
Luigi is willing to lend Klaus $5,000 for one year at a nominal rate of interest of 7%. Both Luigi and Klaus expect the rate of inflation to be 2% in the next year. If the actual rate of inflation over the year was 1%, what is the real return did Luigi receive?
A. 4% B. 5% C. 8% D. 6%