Ashley puts money in a savings account at her bank earning 2 percent interest. One year later she takes her money out and notes that prices rose 3 percent. Ashley earned a
a. real interest rate of -1 percent due to inflation
b. real interest rate of 1 percent due to inflation.
c. nominal interest rate of -1 percent due to inflation.
d. nominal interest rate of 1 percent due to inflation.
a
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If, in response to an increase in the price of chocolate the quantity of chocolate demanded decreases, economists would describe this as
A) a change in consumer income. B) a decrease in quantity demanded. C) a decrease in demand. D) a decrease in consumers' taste for chocolate.
An increase in marginal tax rates will
A) increase the incentive of individuals to earn additional income. B) allow taxpayers to keep more of what they earn. C) reduce the share of additional earnings that individuals are permitted to keep. D) make tax deductible purchases more expensive.
In the aggregate demand and aggregate supply model, an increase in the growth rate of the velocity of money differs from an increase in money supply growth rate in that:
A. the SRAS curve will eventually shift back to its original position after an increase in money supply growth. B. the AD curve will eventually shift back to its original position after an increase in velocity growth. C. the SRAS curve will eventually shift upwards after an increase in velocity growth. D. the AD curve will eventually shift back to its original position after an increase in money supply growth.
The textbook points out that rent controls have
A) benefited upper-income or existing tenants. B) had no effect on the market for housing. C) greatly benefited the homeless. D) attracted increases in low-income housing.