An economic boom in one country usually causes a recession in other countries.
Answer the following statement true (T) or false (F)
False
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Sam deposits money into an account with a nominal interest rate of 4 percent. He expects inflation to be 1.5 percent. His tax rate is 32 percent. Sam's after-tax real rate of interest
a. will be 1.2 percent if inflation turns out to be 1.5 percent; it will be higher if inflation turns out to be lower than 1.5 percent. b. will be 1.2 percent if inflation turns out to be 1.5 percent; it will be lower if inflation turns out to be lower than 1.5 percent. c. will be 1.7 percent if inflation turns out to be 1.5 percent; it will be higher if inflation turns out to be lower than 1.5 percent. d. will be 1.7 percent if inflation turns out to be 1.5 percent; it will be lower if inflation turns out to be lower than 1.5 percent.
If planned aggregate expenditure is less than total production,
What will be an ideal response?
The graph below indicates that the economy can produce both:
A. 10 units of eggs and 20 units of rye, and this would be efficient. B. 20 units of eggs and 5 units of rye, although this would not be efficient. C. 10 units of eggs and 20 units of rye, although this would not be efficient. D. 20 units of eggs and 5 units of rye, and this would be efficient.
Which of the following would cause the nominal exchange rate to appreciate?
A) The real exchange rate depreciates. B) The domestic inflation rate decreases. C) The domestic inflation rate increases. D) The government budget deficit decreases.