Suppose the nominal interest rate is 10 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 6 percent. At the end of the year, you have earned:
A. a real rate of return of 4 percent.
B. an increase in your purchasing power.
C. a nominal increase in your savings of $100.
D. All of these statements are true.
D. All of these statements are true.
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Which of the following statements is TRUE?
I. A firm that is not economically efficient does not maximize profit. II. Economic efficiency depends on the relative costs of resources. III. A technological efficient firm is also economically efficient. A) I only B) II only C) II and III D) I and II
In New Keynesian analysis, firms are assumed to be
A) interested solely in maximizing their profit. B) interested in both their profit and the avoidance of business cycles. C) interested solely in avoiding business cycles. D) interested solely in maximizing production.
Which of the following is an incorrect statement? a. An economy with many unemployed workers and idle factories is not operating efficiently. b. Idle factories represent unemployed capital resources
c. A large amount of unemployed resources will shift the production possibilities curve outward. d. Idle farms represent unemployed land resources.
With respect to environmental issues, the GATT:
a. does not allow countries to adopt environmental laws that affect imports. b. allows countries to adopt environmental laws that affect domestic production but not imports. c. allows countries to adopt environmental laws that are applied uniformly against domestic producers and imports. d. allows countries to adopt more stringent laws affecting imports than domestic producers.