If a bank posts a nominal interest rate of 4 percent, and inflation is expected to be 3 percent, then
a. the expected real interest rate is 7 percent.
b. the expected real interest rate is 1 percent.
c. the expected real interest rate is 1.33 percent.
d. the expected real interest rate is 12 percent.
b
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According to this Application, increases in unemployment insurance will ________ the total amount of employment
A) either increase or decrease B) have no effect on C) increase D) decrease
As of 2008, the members of the WTO account for 97 percent of the world's international trade
Indicate whether the statement is true or false
Based on the diagram, if potential output equals 8,000 and the real interest rate is 4 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output. 
A. a recessionary; lower B. no output; not change C. a recessionary; raise D. an expansionary; raise
One reason why, in the short run, the marginal product of labor might increase initially as more workers are hired is that
A) the first workers hired get to use the best equipment. B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task. C) the best workers are hired first and later hires are not as skillful. D) beyond some point, a firm has hired too many workers.