Suppose that over the past year, the real interest rate was 6 percent and the inflation rate was 4 percent. It follows that
a. the dollar value of savings increased at 6 percent, and the purchasing power of savings increased at 2 percent.
b. the dollar value of savings increased at 6 percent, and the purchasing power of savings increased at 10 percent.
c. the dollar value of savings increased at 10 percent, and the purchasing power of savings increased at 2 percent.
d. the dollar value of savings increased at 10 percent, and the purchasing power of savings increased at 6 percent.
d
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Suppose Fred's marginal utility of an extra dollar of income is 56, and Sally's is 34 . If a dollar is taken from
a. Sally and given to Fred, the economy's total utility will rise by 22 units b. Fred and given to Sally, the economy's total utility will rise by 22 units c. Sally and given to Fred, the economy's total utility will rise by 34 units d. Sally and given to Fred, the economy's total utility will rise by 56 units e. Fred and given to Sally, the economy's total utility will rise by 34 units
One of the social benefits of frictional unemployment is that
a. workers get time off from work. b. economic growth is limited. c. workers move from less to more valuable firms. d. wage rates decrease.