The real rate of return on holding cash is equal to:
A. the real interest rate.
B. zero minus the inflation rate.
C. the expected inflation rate.
D. the nominal interest rate.
Answer: B
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Bank capital is
A) the current market value of the bank's physical assets. B) the historical or original value of the bank's physical assets. C) the capital contributed by the bank's shareholders plus accumulated retained profits. D) the sum of the value of the bank's assets plus the value of the bank's liabilities.
Despite the appealing logic of the Coase theorem, private actors often fail to resolve on their own the problems caused by externalities
a. True b. False Indicate whether the statement is true or false
Which set of changes is definitely predicted to raise Real GDP in the short run?
A) Wealth increases and there is an adverse supply shock. B) Individuals expect higher (future) incomes and wage rates fall. C) Business taxes rise and wage rates fall. D) The U.S. dollar appreciates and there is a beneficial supply shock. E) none of the above
Studies have shown that in the 1980s the wage gap between college-educated workers and those with high school education or less
A. decreased dramatically. B. decreased slightly. C. remained unchanged. D. widened dramatically.