Given that real interest rates are constant, an increase in the expected rate of inflation will tend to
A) decrease the nominal rate of interest.
B) increase the nominal rate of interest.
C) cause lower inflation rates.
D) cause no change in the nominal rate of interest.
B
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The rate at which banks can borrow excess reserves from other banks is equal to
A) the discount rate. B) the required reserve ratio. C) the interest rate paid on reserves held with the Fed. D) none of the above.
A decrease in disposable income will:
a. shift the consumption function upward b. shift the consumption function downward. c. cause an upward movement along the consumption function. d. cause a downward movement along the consumption function. e. make the consumption function flatter.
Suppose Melita is willing to pay a maximum of $30 for a pair of normal sunglasses and $36 for the same pair with a double UV-protection filter. If the unit cost of upgrading a product is $6, the seller will upgrade the product if Melita pays at least $35 for it
Indicate whether the statement is true or false
Which of the following would lead to a decrease of the U.S. demand for euros?
a. A decrease in the U.S. interest rate, with no change in the European interest rate b. An increase in U.S. GDP c. Resurgence of interest in European precision tools d. Expectations of a rise in the dollar price of the euro e. A sudden increase in anti- European sentiment.