The nominal interest rate is 7% and the real interest rate is 2.75%. What is the inflation rate?
A) 3.75%
B) 4.55%
C) 4.25%
D) 9.75%
C
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The above figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that
A) Bobby views soda as an inferior good. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) the income elasticity of demand for soda is 1.
Refer to the above figure. The figure gives the payoff matrix for two individuals who are being accused of robbing a bank together. If Bob confesses, what is the best strategy for Harry?
A) Confess. B) Don't confess. C) Flip a coin to decide what to do. D) There is no best strategy.
A federal budget deficit occurs when: a. there is deflation
b. federal government purchases exceed net taxes. c. there is inflation. d. aggregate demand is greater than aggregate supply. e. aggregate supply is greater than aggregate demand.
Suppose a legislation passed by the government encourages domestic oil exploration thereby reducing petroleum imports substantially. If the cost of production is uniform for all producers, which of the following will be observed in the petroleum market?
a. The world price of petroleum would decline. b. The domestic price of petroleum would decline. c. The world price of gasoline will remain unaffected. d. Crude oil consumption in the domestic and the world market would decrease.