If you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is
A) 7 percent.
B) 22 percent.
C) -15 percent.
D) -8 percent.
D
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In the Keynesian cross diagram, an increase in autonomous consumer expenditure causes the aggregate demand function to shift ________, the equilibrium level of aggregate output to rise, and the IS curve to shift to the ________,
everything else held constant. A) up; left B) up; right C) down; left D) down; right
If the price of a commodity is above marginal cost, then the economy will tend to
a. overproduce the item. b. underproduce the item. c. produce the optimal amount of the item. d. overproduce and underproduce the item cyclically.
In this graph, at point e ______.
a. economic profits are growing
b. short-run and long-run average total costs are equal
c. the economic situation is unstable
d. short-run and long-run average total costs are far apart
In the Nash equilibrium of a prisoner's dilemma:
A. both players have equal payoffs. B. total economic surplus is maximized. C. there is unrealized opportunity for both to gain. D. there is no cash left on the table.