The real rate of interest measures the ________ of capital investment.
A. opportunity cost
B. value of the marginal product
C. relative price
D. marginal benefit
Answer: A
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In the prisoners' dilemma game, each player
A) has only one possible strategy. B) can choose from two strategies. C) can choose from three strategies. D) can choose from four strategies.
The main determinant of how quickly expected inflation adjusts to changes in monetary policy is
A) the slope of the Phillips curve. B) the slope of the short-run aggregate supply curve. C) the credibility of the central bank. D) the degree of indexation in the economy.
The natural rate of interest is the rate
A) which equates saving and investment under any employment condition. B) which equates saving and investment with acceptable, but low, unemployment. C) which equates saving and investment at an unemployment rate of 5 percent or less. D) which equates saving and investment at full employment.