The official government measure of poverty uses the relative approach to defining poverty
Indicate whether the statement is true or false
F
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Loretta agrees to lend Ted $500,000 to buy computers for his consulting firm. They agree to a nominal interest rate of 8%. Both expect the inflation rate to be 2%
(a) Calculate the expected real interest rate. (b) If inflation turns out to be 3% over the life of the loan, what is the real interest rate? Who gains from unexpectedly high inflation, Loretta or Ted? (c) If inflation turns out to be 1% over the life of the loan, what is the real interest rate? Who gains from unexpectedly low inflation, Loretta or Ted?
Does not increase real GDP
What will be an ideal response?
A bank creates money when it:
A. gets new checkable deposits which the depositor formerly held as cash. B. has a loan paid off, which creates excess reserves for the bank. C. makes a loan from its excess reserves. D. holds back excess reserves because of an increase in the required reserve ratio.
Figure 13.1 shows a demand and costs of an unregulated monopoly. This firm must:
A. be a natural monopoly. B. have an exclusive government license. C. be a monopoly because it has a patent. D. be operating in a contestable market.