If the real interest rate is 6 percent and the price level is falling at a rate of 2 percent, what is the nominal interest rate?
a. 4 percent
b. 6 percent
c. 8 percent
d. 10 percent
a
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A rightward shift in the aggregate demand curve can be caused by an increase in:
a. the price level. b. business investment spending. c. taxes. d. production costs.
If a country's currency appreciates, which of the following will most likely happen?
a. Net exports will fall and aggregate demand will increase. b. Net exports will rise and aggregate demand will increase. c. Net exports will fall and aggregate demand will decrease. d. Net exports will rise and aggregate demand will decrease.
Kelly puts money in a savings account. One year later she has two percent more dollars and can buy three percent more goods. Kelly earned a real interest rate of
a. two percent and prices fell one percent. b. two percent and prices rose one percent. c. three percent and prices rose one percent. d. three percent and prices fell one percent.
The most challenging task assigned to conventional monetary and fiscal policies is
A. fighting inflationary recessions. B. fighting depressions. C. fighting runaway inflation. D. lowering our foreign trade deficit.