If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals
A) 1.7%.
B) 3.2%.
C) 3.3%.
D) 4.7%.
C
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In the Nash equilibrium of a prisoner's dilemma:
A. there is unrealized opportunity for both to gain. B. both players have equal payoffs. C. there is no cash left on the table. D. total economic surplus is maximized.
From 2007 to 2008, the Federal Reserve System reduced interest rates, the price which borrowers pay. As a result, economists expected that the quantity of money supplied would
a. increase. b. decrease. c. not change. d. Uncertain-economic theory has no answer to this question.
Sally Rand owns a ceiling fan company. She sells 1,000 ceiling fans at $50 each. Each fan costs her $20 . She uses her own money to buy the fans; she withdraws the money from her savings account where it earns 5 percent interest. Before going into the ceiling fan business, she worked as a fan-dancer at $25,000 a year. Should Sally remain in business?
Social Security taxes are regressive because
A. they are not applied to income beyond a certain amount. B. they are applied to welfare recipients. C. they apply only to rich people. D. they are applied to retired people only.