If the nominal interest rate is 8 percent and the real interest rate is 5 percent, then the inflation premium is 13 percent.
Answer the following statement true (T) or false (F)
False
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Since it is always a negative number, economists use the convention of taking the absolute value of:
a. income elasticity of demand. b. cross price elasticity of demand. c. price elasticity of supply. d. price elasticity of demand. e. any elasticity calculation.
For a monopoly, price always equals marginal revenue
a. True b. False Indicate whether the statement is true or false
Marta lends money at a fixed interest rate and then inflation turns out to be higher than she had expected it to be. The real interest rate she earns is
a. higher than she had expected, and the real value of the loan is higher than she had expected. b. higher than she had expected, and the real value of the loan is lower than she had expected. c. lower than she had expected, and the real value of the loan is higher than she had expected. d. lower then she had expected, and the real value of the loan is lower than she had expected.
The seller side of the market is known as the:
A. supply side. B. income side. C. demand side. D. seller side.