If the nominal interest rate equals 10 percent and the inflation rate equals 6 percent, what does the real interest rate equal?
What will be an ideal response?
The real interest rate equals the nominal interest rate minus the inflation rate, or in this case, 10 percent minus 6 percent, which equals 4 percent.
You might also like to view...
What assumptions lead to the conclusion that that the allocation of resources among firms is efficient
What will be an ideal response?
Retail is
A) downstream. B) upstream. C) is reversed extraction. D) impossible to outsource.
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's risk level rises relative to England and nothing else changes, then
a. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc. c. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate. d. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc. e. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc.1.The balance of payments: a. Includes exactly the same transactions that are included in the foreign exchange market. b. Is the sum of all financial payments between residents of one nation and residents of the rest of the world. c. Is a flow concept. d. All the above.
How does the equilibrium quantity traded change when there is an increase in supply and a decrease in demand?