The nominal rate of interest is
A. the real rate of interest minus the previous year's change in the price level.
B. the same as the price level.
C. lower than the real rate in a period of inflation.
D. the interest rate actually paid by the borrower.
Answer: D
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If one dollar is initially equal in value to one euro and demand for euros increases, then each dollar will be worth
a. more than one euro, and European imports will be cheaper in the United States b. less than one euro, and European imports will be more expensive in the United States c. more than one euro, and European imports will be more expensive in the United States d. less than one euro, and European imports will be cheaper in the United States e. the same as the euro, and there will be no change in the values of imports or exports
Contractionary fiscal policies used to reduce the deficit in the 1990s did not hurt the economy because fiscal and monetary policies were well coordinated at that time
a. True b. False Indicate whether the statement is true or false
Using Figure 4.1, assume that point C represents the best possible mix or optimal level of output for this society. If the market fails and produces a suboptimal mix of output, then it could produce at
A. Point E or F. B. Point A, B, D, or E. C. Point D or F. D. Point A, B, D, or F.
Figure 6.1In Figure 6.1, the total consumer expenditures equal:
A. 200 B. 250 C. 50 D. 30