The real interest rate is
a. the premium that borrowers must pay in order to acquire more purchasing power.
b. the reward lenders receive in exchange for their willingness to delay consumption into the future.
c. equal to the money interest rate minus the inflationary premium.
d. all of the above.
D
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The price of a new textbook increased by 25 percent and the price of a used textbook increased by 30 percent. What happened to the relative price of the new textbook?
A) It increased by 5 percent. B) It increased, but we can't tell by how much without more information. C) It decreased by 5 percent. D) It decreased, but we can't tell by how much without more information.
A firm moves from one SRATC curve to another
a. when it changes the number of workers it employs b. when it has contractual obligations on its plant and equipment c. when it produces more output with the same plant size d. in the short run e. in the long run
A firm that faces a downward sloping demand curve is
A) a price taker. B) a price provider. C) a price searcher. D) a price creator.
Suppose the demand for Pepsi is qp = 54 - 2pp + 1p. The demand for Coke is qc = 54 - 2pc + 1pp. Each firm faces a constant marginal cost of zero. Determine the Bertrand equilibrium prices
What happens to the Bertrand equilibrium prices and profits if increased differentiation causes the demand for Pepsi to become qp = 104 - 2pp + 1pc while the demand for Coke remains unchanged?