If the purchasing power of your savings is increasing over time, we know that:
A. the real rate of interest is positive.
B. if the nominal interest rate is zero, inflation must be negative.
C. the inflation rate must be less than the nominal rate of interest.
D. All of these statements are true.
D. All of these statements are true.
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Under rate-of-return regulation, the price is set so that
A) price equals the marginal cost of production. B) the firm earns a positive economic profit. C) the firm earns a monopoly profit. D) the firm earns a normal rate of return on investment.
The supply of foreign currencies is upward sloping and the demand for foreign currencies is downward sloping
a. True b. False Indicate whether the statement is true or false
Jane wants to buy a beautiful doll as a gift for her sister's birthday. She knows that the same product is offered in different shops with prices of $120, $100, and $80 with odds of one-third of finding each price. She just stopped at a shop and knows that the price is $100. If the search cost is $8 per time, what should she do?
A. Accept the offer in hand. B. She should toss a coin. C. Search once more and decide again upon knowing the price. D. Insufficient information to determine.
Why is wage and price flexibility crucial to the idea of the "invisible hand?"
What will be an ideal response?