If the nominal interest rate is held constant, a higher inflation rate tends to
A) reduce the real interest rate.
B) increase the real interest rate.
C) leave the real interest rate unchanged.
D) have no effect on the savings decisions of households.
A
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Higher future living standards require:
A. increased rates of current consumption. B. increased rates of population growth. C. reduced rates of current consumption. D. reduced rates of current investment.
When a nation reduces the barriers to international trade:
A. the total value of all goods and serviced produced by the nation rises. B. the total value of all goods and services produced by the nation falls. C. each individual citizen becomes better off. D. each individual citizen becomes worse off.
The demand for a product is likely to be more elastic:
A. the smaller the share of the total budget spent on the product. B. when more complementary products are available. C. in the short run than in the long run. D. when more good substitutes for the product are available.
The investment function would shift outward to the right if
A. there was a decrease in business taxes. B. there was more uncertainty about future economic conditions. C. real disposable income decreased. D. interest rates decreased.