If the nominal interest rate is 5 percent and the rate of inflation is -2.5 percent, then the real interest rate is
a. -7.5 percent.
b. -2.5 percent.
c. 2.5 percent.
d. 7.5 percent.
d
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Hutch Technology makes computer monitors, which sell for $100 each. What is the opportunity cost of 10 monitors?
A. $1,000 B. The other goods that could be produced with the resources that produce the 10 monitors C. The profits that Hutch earns when 10 monitors are sold D. The lost profits that Hutch if the monitors are not produced E. All of the responses are correct.
The dictator of Turan has recently begun to arbitrarily seize farms belonging to his political opponents, and he has given the farms to his friends. His friends don't know much about farming. The courts in Turan have ruled that the seizures are illegal, but the dictator has ignored the rulings. Other things equal, we would expect that the growth rate in Turan will
a. fall temporarily, but will return to where it was when the new owners learn how to farm. b. increase because the total amount of human capital in the country will increase as the new owners learn how to farm. c. fall and remain lower for a long time. d. not be affected unless widespread civil disorder or civil war results.
(Last Word) If variables X and Y are positively correlated, this means that:
A. X is the cause of Y. B. Y is the cause of X. C. causation necessarily exists, but we don't know whether X or Y is the cause. D. causation may or may not exist between X and Y.
The Federal government has tried to eliminate agricultural surpluses by:
A. Decreasing supply and demand B. Increasing supply and demand C. Decreasing supply and increasing demand D. Increasing supply and decreasing demand