If the inflation rate is 5 percent and the real rate of interest is 3 percent, the nominal interest rate is
A) 8 percent.
B) 5 percent.
C) 3 percent.
D) 2 percent.
A
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Refer to Table 10.1. Suppose that all of the information given in the Table remains the same except that taxes increase by $1.0 billion and transfers increase by $1.5 billion. Equilibrium real GDP for this economy is equal to
A) $6.25 billion. B) $17 billion. C) $25 billion. D) $47 billion.
One major assumption of economics is that people
A) act as if they systematically pursue self-interest. B) behave randomly without any predictable pattern. C) are sometimes rational and sometimes irrational. D) always pursue the interests of others.
Firms must prevent resale between segments using a variety of:
a. fences b. bridges c. tunnels d. none of the above
Fab Tools Inc can produce 150 widgets and 100 axes in a month. Another company AllMyTools Inc can produce 180 widgets and 50 axes per month. Which of the following statements is true?
a. Fab Tools has a comparative advantage in the production of widgets. b. Fab Tools has an absolute advantage in the production of both goods. c. AllMyTools has a comparative advantage in the production of widgets. d. AllMyTools has an absolute advantage in the production of both goods.