Suppose the nominal interest rate is 10 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 6 percent. At the end of the year, you have earned:
A. a real rate of return of 4 percent.
B. a nominal increase in your savings of $100.
C. an increase in your purchasing power.
D. All of these statements are true.
Answer: D
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A firm that has negative economic profits has accounting profits that are
A) zero. B) positive. C) negative. D) indeterminate without more information.
Over the long run, oligopoly produces ______ output than perfect competition.
a. slightly more b. the same c. less d. much more
An In the News article titled "Jury Awards $26 Million For Suppressed Technology" reported, that a county superior court jury in Oakland ordered Universal to pay $25.7 million to two California entrepreneurs. The most correct implication of this is that Universal
A. Makes zero economic profits. B. Charges lower prices than might be expected in a competitive market. C. Is a highly efficient, high-tech industry. D. Attempted to suppress R&D.
A major technological advance would be represented on a production possibilities curve by a(n):
a. movement off the production possibilities curve toward a point outside the curve. b. movement toward the curve from a point inside the curve. c. outward shift of the entire curve. d. movement to the left along the curve to a higher point.