Suppose the nominal interest rate is 10 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 4 percent. At the end of the year, you have earned a real rate of interest of:

A. 4 percent.
B. 6 percent.
C. 10 percent.
D. 14 percent.


B. 6 percent.

Economics

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What will be an ideal response?

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The Double Dividend Effect requires

A. double credit on airline miles. B. two different taxes. C. no taxes on stock dividends. D. Pigouvian taxes.

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When a permanent negative supply shock hits the economy ________

A) in the long-run, output is permanently lowered whether the central bank reacts or not B) inflation decreases in the short-run C) there is no long-run effect on inflation whether the central bank reacts or not D) all of the above E) none of the above

Economics

An uninformed party can use ________ to learn about the information held by the informed party

A) signaling B) screening C) a warranty D) educational attainment

Economics