The federal funds rate is closely tied to many interest rates on many types of loans. Which one is the exception?
a. Auto loan rates
b. Adjustable rate mortgages
c. Adjustable rate home equity loans
d. 30-year Treasury bonds
e. Business loans
D
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If the inflation rate is 3 percent and the real interest rate is 3 percent, then what is the nominal interest rate?
What will be an ideal response?
Refer to Figure 2-15. In the circular flow diagram, market K represents
A) product markets. B) households. C) firms. D) factor markets.
Jack has an MPC of 0.82 and Jill has an MPC of 0.78. Ceteris paribus, if the government transfers income from people who behave like Jack to people who behave like Jill,
A. Aggregate demand will increase. B. Aggregate demand will decrease. C. It is not possible to predict what will happen to aggregate demand. D. Aggregate demand will remain the same.
The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants. How should the firm allocate total output between the two plants in order to maximize profit?
A. 20 to plant 1, 50 to plant 2 B. 10 to plant 1, 40 to plant 2 C. 20 to plant 1, 60 to plant 2 D. 20 to plant 1, 30 to plant 2 E. 40 to plant 1, 40 to plant 2