If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent, then the inflation rate is
a. -2.5 percent.
b. 0.45 percent.
c. 2.5 percent.
d. 13.5 percent.
c
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Some sales managers are talking sho
A) "Since our competitors raised their prices our sales have doubled." B) "It has been an unusually mild winter; our sales of wool scarves are down from last year." C) "We decided to cut our prices, and the increase in our sales has been remarkable." D) none of the above
Other things equal, along the aggregate demand curve, a higher price level is associated with
A) an increase in the quantity of real GDP demanded. B) a decrease in the quantity of real GDP demanded. C) a decrease in the quantity of nominal GDP demanded. D) higher income levels.
In autarky equilibrium,
A) production equals consumption. B) exports equal imports. C) there is no international trade. D) All of the above.
The money supply is $10 million, currency held by the nonbank public is $2 million, and the reserve—deposit ratio is 0.2. Bank reserves are equal to
A) $1.6 million. B) $2 million. C) $4 million. D) $8 million.