The nominal interest rate is:
A. the amount of interest the bank pays you for saving or charges you for borrowing.
B. the reported interest rate, adjusted for the effects of inflation.
C. the everyday notion of the interest rate adjusted for inflation.
D. the amount of interest the bank charges you for saving or pays you for borrowing.
Answer: A
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A tax credit given to first-time home buyers would result in a _____________ shift in the ______________ curve for housing, which would lead to the unintended result of a(n) _____________ in the price of housing.
A. leftward; supply; increase B. leftward; demand; decrease C. rightward; supply; decrease D. rightward; demand; increase E. none of the above
One reason the housing bubble occurred is because the:
A. securitization of mortgages meant more mortgages were low-risk, attracting investors. B. herd instinct caused everyone to stop buying homes. C. recency effect affected people's perceptions of home values. D. All of these statements are true.
When price is greater than marginal cost for a firm in a competitive market,
a. marginal cost must be falling. b. the firm must be minimizing its losses. c. there are opportunities to increase profit by increasing production. d. the firm should decrease output to maximize profit.
Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. Mike's opportunity cost of producing one car is ________ pound(s) of cheese.
A. 250 B. 1/250 C. 500 D. 1/20