The real rate of interest is 3% and the anticipated rate of inflation is 2%. What is the nominal rate of interest?
A. -1%
B. 0%
C. 1%
D. 5%
Answer: D
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Refer to the scenario above. Tom should use ________ to play this game
A) backward induction B) forward induction C) mixed strategies D) his dominated strategy
A flat LM curve implies that
A) an increase in government spending will change output by a relatively small amount. B) a decrease in taxes will change output by a relatively small amount. C) changes in government spending and taxes will have a large multiple effect on output. D) A and B.
An asset that derives its value from some other underlying asset is a
A) stock. B) bond. C) derivative. D) CD.
Many governments around the world attempt to improve the incomes of commodity producers by taking steps to increase the commodity price in the domestic market
Although this may reduce quantity demanded for the product, the action may be effective because: A) commodity supply tends to be inelastic, so quantity does not decline by much. B) commodity supply tends to be elastic, so producer income increases as a result of the higher prices and quantities. C) commodity demand tends to be inelastic, so higher prices generate higher sales revenue. D) commodity supply tends to be elastic, so producer income increases as a result of the higher prices and quantities.