A savings and loan strives for a 6% real return on its loans and estimates a 7% annual rate of inflation. It should therefore charge its borrowers a nominal interest rate of
A) 13%.
B) 7%.
C) 6%.
D) 1.17%.
E) 1%.
A
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If the exchange rate changes from $2.00 = 1 euro to $1.98 = 1 euro then
A) the dollar has appreciated. B) the euro has appreciated. C) the euro has stayed constant in value. D) the dollar has depreciated.
Answer the following statements true (T) or false (F)
1. Probably the main characteristic of a demand curve is that it slopes upward from left to right. 2. Typically, the higher the price of a commodity, the greater the quantity supplied. 3. Price ceilings usually create surpluses since supply is increased. 4. Price floors can create surpluses if price floors are above market prices. 5. Price elasticity of demand is a measure of consumer responsiveness to a change in price.
An increase in aggregate demand in the Classical model causes the price level to
A) rise but output remains constant. B) fall but output remains constant. C) rise but output to fall. D) fall but output to rise.
"Mere size is no offense" is an antitrust ruling based on the rule of reason
a. True b. False