If the nominal interest rate is 6% and the inflation rate is 3%, the real interest rate is
a. 2%
b. 3%
c. 6%
d. 9%
b
You might also like to view...
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker decides to only make one transaction what is his profit/bid-ask margin
a. $8 b. $10 c. $12 d. $16
In a command economy:
a. economic effort is devoted to goals passed down from a ruler or ruling class. b. economic effort is commanded by the people of a country. c. there is no coordinated economic effort. What you produce is what you get to consume. d. economic effort is determined by the government, businesses, and the people of a country.
The demand for good X is estimated to be Qxd = 10, 000 ? 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income, and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, we know that the demand for good X is:
A. inelastic. B. elastic. C. unitary elastic. D. neither elastic, inelastic, nor unitary elastic.
Cartels are typically subject to cheating by their members because
A) if the other firms stick to the agreement, a firm can increase its profits by cutting its price. B) barriers to entry do not exist so new entrants will join. C) the U.S. Justice Department will punish any cartel agreement before the cartel has had a chance to operate. D) product differentiation allows the firms in the cartel to cheat.