With 6 percent inflation and a 1 percent nominal interest rate, the real interest rate is:
A. 1 percent.
B. 7 percent.
C. 5 percent.
D. ?5 percent.
Answer: D
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When variable A rises by 10 units, variable B rises by 15 units. The slope of the line describing this relationship is
A. always 2/3. B. either 2/3 or 1.5, depending on which variable goes on which axis of the graph. C. either 1.5 or ?1.5, depending on which variable goes on which axis. D. always ?1.5.
Use the following graph for a competitive market to answer the question below.
A price floor of $10 per unit will result in a
A. shortage of 200 units. B. surplus of 200 units. C. 50 units being traded. D. No shortage or surplus
When a country decides to produce fewer bombers and more public housing projects, it is answering the ________ part of one of the two big economic questions
A) "how" B) "what" C) "defense" D) "for whom"
An most important service provided by underwriters is
A) lowering of information costs. B) dealing with problems of moral hazard. C) insuring firms against loss from fire. D) insuring firms against loss from employee theft.