If a lender charged a 4 percent nominal interest rate and the expected inflation rate is 1 percent, what is the difference between the real rate the lender received and the real rate the lender expected when actual inflation ended up being 1 percent?
a. 2 percent
b. 4 percent
c. -4 percent
d. 1 percent
e. 0 percent
E
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People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as
A) discouraged workers. B) wage-rate busters. C) unemployed. D) non-participants.
The profit maximizing condition for a firm in monopolistic competition is to produce so that
A) marginal cost equals marginal revenue. B) marginal cost equals price. C) average total cost equals price. D) price equals marginal revenue.
Use the data in the above table and suppose that labor is the only variable factor of production. At what level of output does the marginal cost start to rise at Decent Donuts?
A) 0 dozen donuts B) 111 dozen donuts C) 128 dozen donuts D) There is not enough information given to determine when the marginal cost starts to increase.
Which price index measures the change in housing prices from repeated sales information?
A) S&P / Case-Shiller index B) GDP deflator C) Chain-weighted consumer price index D) Dow-Jones index