If the nominal interest rate is greater than the real interest rate,
A) it is an indication of economic growth.
B) inflation must be occurring.
C) lenders must lose because they can only make loans using the real interest rate.
D) the real interest rate must be negative.
E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.
B
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When economic analysis takes place within the context of maximizing a social welfare function, the conclusion always is _____
a. that income should be completely redistributed b. that income should not be redistributed at all c. that some level of redistribution is optimal d. that income redistribution has no relations to maximizing social welfare
Refer to Scenario 13.16. If Gooi can move first, and Ici threatens to buy yogurt machines, no matter what Gooi does,
A) Gooi will have to buy gelato machines, so Ici will get its highest possible profit. B) Gooi will buy yogurt machines, which it otherwise wouldn't have, in order to retaliate. C) the equilibrium payoff of ($50,$50 ) will be enforced. D) Gooi will not change its behavior, because Ici's threat is not credible. E) Gooi will threaten to buy yogurt machines, no matter what Ici does, to see whether that will get the people at Ici to change their minds.
Diminishing marginal utility means that
a. as you consume more of a good, other things constant, the total satisfaction you obtain from consuming this good tends to fall b. as you hire more labor, other things constant, the total amount produced begins to fall c. as you hire more labor, other things constant, the marginal product begins to fall d. as you consume more of a good, other things constant, the additional satisfaction you obtain from each additional unit of the good tends to fall e. as you consume more of a good, other things constant, the extra satisfaction you obtain from each extra good becomes negative
Libor is best defined as the ________.
A) interest rate of the National Bank of London B) short-term interest rate for dollars held in the Eurodollar market C) interest rate of the European Union D) deposit rate that applies to commercial loans in the European Union