Which of the following statements about nominal interest and real interest is true?
A. Nominal interest is a yearly rate and real interest is a monthly rate.
B. Nominal interest does not adjust for inflation, whereas real interest does.
C. Nominal interest is what the lender receives and real interest is what the borrower pays.
D. Nominal interest and real interest are two ways of saying the same thing.
B. Nominal interest does not adjust for inflation, whereas real interest does.
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Suppose the government has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer
Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A) $5 per quart and 300 quarts of beer B) $3 per quart and 500 quarts of beer C) $3 per quart and 100 quarts of beer D) $1 per quart and 300 quarts of beer
If an individual has a constant MRS of shoes for sneakers of 3/4 (that is, he or she is always willing to give up 3 pairs of sneakers to get 4 pairs of shoes) then, if sneakers and shoes are equally costly, he or she will
a. buy only sneakers. b. buy only shoes. c. spend his or her income equally on sneakers and shoes. d. wear sneakers only 3/4 of the time.
The short run sequence of events following an unanticipated shift to a more expansionary monetary policy would be lower interest rates followed by dollar
a. depreciation, and an increase in the current account deficit. b. depreciation, and a decrease in the current account deficit. c. appreciation, and an increase in the current account deficit. d. appreciation, and a decrease in the current account deficit.
All of the following apply to the description of a market in equilibrium except:
A. quantity supplied equals quantity demanded. B. the intersection of the supply and demand curves. C. no excess supply exists. D. the price of the good is falling.