The nominal interest rate is 5 percent and the inflation rate is 2 percent. What is the real interest rate?
a. 7 percent
b. 2.5 percent
c. 10 percent
d. 3 percent
d
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An economy that is producing a gross domestic product worth $100 million but is capable of producing an output worth $150 million at full-employment equilibrium would have a(n): a. recessionary gap of $50 million
b. expansionary gap of $100 million. c. recessionary gap of $150 million. d. expansionary gap of $250 million.
Which of the following is the best example of land?
A. A barber's chair. B. A factory that produces new goods and services. C. The water used to make a soft drink. D. The ethanol refined from corn.
Which of the following is not a characteristic of a monopoly?
A. A monopolist faces a downward-sloping demand curve. B. There are no close substitutes for a monopolist's product. C. After the first unit, the monopolist's marginal revenue is always less than its price. D. A monopolist is a price taker.
If the elasticity of demand for good ALPHA is 2.0,
A. A 10% fall in the price of ALPHA will raise quantity demanded by 2%. B. A price increase will raise total revenue for sellers. C. A 17% increase in the price of ALPHA will lower quantity demanded by 17%. D. A 10% rise in the price of ALPHA will lower quantity demanded by 20%.