The real interest rate is calculated as the
a. expected rate of inflation divided by the nominal interest rate
b. real GDP plus the expected rate of inflation
c. nominal interest rate minus real GDP
d. nominal interest rate minus the expected rate of inflation
e. real GDP multiplied by the expected rate of inflation
D
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Refer to the accompanying table. Martha's opportunity cost of making of a pie is: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. 80 cakes. B. 8 cakes. C. 3/4 of a cake. D. 4/3 of a cake.
Profits, rents, interest, and royalties are examples of:
A. capital income. B. labor income. C. investment. D. consumption.
Compared to hiring a white worker, a discriminatory employer is $5 less happy when he hires a black worker and is $6 less happy when he hires a Hispanic worker. The firm faces hourly wage rates of $20 for whites, $16 for blacks, and $14 for Hispanics. Which of the following describes the firm's hiring decision?
A. The firm hires all white workers. B. The firm hires a mixture of white and Hispanic workers. C. The firm hires all black workers. D. The firm hires all Hispanic workers. E. The firm hires a mixture of white and black workers.
A point outside of the production possibility frontier is:
A. inefficient. B. impossible. C. efficient. D. on the contract curve.