Gladys agrees to lend Kay $1,000 for one year at a nominal rate of interest of 5 percent. At the end of the year prices have actually risen by 7 percent
a. Gladys earns extra real income.
b. Kay loses extra real income.
c. Kay receives extra real income.
d. Neither party gains or loses if the loan is repaid.
c
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Which of the following will not increase a nation's real GDP?
A. number of workers B. average price level C. technological progress D. labor productivity
In the Keynesian model, consumption
A) is positively related to income but saving is not systematically related to either income or interest rates. B) and saving are positively related to the real interest rate. C) and saving are positively related to income. D) is positively related to income and saving is negatively related to the stock market.
Comparing aggregate expenditure and aggregate incomes shows that
A) aggregate expenditure is usually greater than aggregate income. B) aggregate income is usually greater than aggregate expenditure. C) they are equal. D) aggregate income cannot equal aggregate expenditure if we have any savings.
Which of the following is NOT an example of an international public good?
A) Capital flows to less-developed countries B) Last-resort lending C) Open markets during a recession D) Regional trade agreements