When calculating the nominal interest rate with the precise formula, the interaction term:
a. Is a measure of the difference between the nominal interest rate and the real interest rate.
b. Is compensation for the decline in purchasing power of the real interest earned.
c. Is never useful to calculate and can be dropped without any loss of information.
d. Measures the degree of interaction between businesses and individuals.
e. Measures the degree of interaction between expected inflation and consumption.
.B
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A major reason why it is difficult to lower the barriers to free trade is
A) that total benefits are less than total costs from free trade. B) the uneven distribution of gains and losses from free trade. C) the loss of jobs without any gain of jobs from free trade. D) the inability to compensate losers from free trade. E) that the barriers allow us to compete with cheap foreign labor.
In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will
A) export 50 units. B) import 50 units. C) export 200 units. D) import 150 units.
Suppose Always There Wireless serves 100 high-demand wireless consumers, who each have a monthly demand curve for wireless minutes of QdH = 200 - 100P, and 300 low-demand consumers, who each have a monthly demand curve for wireless minutes of QdL = 100 - 100P, where P is the per-minute price in dollars. The marginal cost is $0.25 per minute. Suppose Always There Wireless charges $0.30 per minute. If Always There Wireless charges the highest fixed fee that it can without losing the low-demand consumers, what is the profit from sales to each of the high-demand consumers?
A. $28.00 B. $24.50 C. $33.00 D. $28.13
How would the market for smartphones be affected if the government charged an excise tax of $5.00 on each smartphone sold?
A) The supply of smartphones would decrease. B) The demand for smartphones would increase. C) The demand for smartphones would decrease. D) The price of smartphones would rise by $5.00.