When the nominal rate of interest and the rate of inflation are the same, the real interest rate is zero
Indicate whether the statement is true or false
TRUE
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During recessions, GDP falls and unemployment increases. Why might the actual output produced not fall as much as officially measured GDP during recessions?
a. There is an increase in involuntary part-time employment during recessions, the output from which is not accounted for in GDP b. Workers who became unemployed during the recession may produce goods in the underground economy c. Unemployment benefits to laid off workers are included in GDP d. Laid off workers may start their own businesses, but profit income from self-employment is not accounted for in GDP e. Unemployed workers have more leisure time to enjoy.
According to the Latin phrase ceteris paribus:
a) Nothing else changes. b) Things do not remain equal. c) Resources are limited. d) There is no government intervention.
A constant-cost industry will have
A) a perfectly elastic long-run supply curve. B) a perfectly inelastic long-run supply curve. C) an upward sloping demand curve in the long run. D) an upward sloping supply curve in the long run.
Each of these is a basic characteristic of a capitalist economy, except
A. the institution of private property. B. central planning. C. laissez-faire. D. individuals acting in their own self-interest.