If inflation is expected by both borrowers and lenders, then we would expect
a. real rates to be higher than nominal rates of interest.
b. real rates to be equal to nominal rates of interest.
c. real rates to be lower than nominal rates of interest.
d. nominal rates of interest to be less than the expected inflation rate.
c
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For an economy starting at full employment real GDP, a decrease in investment results in a(n)
A. decrease in full-employment output. B. inflationary output gap. C. recessionary output gap. D. increase in full-employment output.
Using a graph, illustrate the effect that an increase in production costs will have on the equilibrium price and quantity of a good
What will be an ideal response?
Which of the following statements provides the best description of one reason why regulation of an industry might not increase economic efficiency?
a. There are more employees of regulated industries than affected customers. b. Insufficient regulator pay makes it difficult to hire effective regulators. c. The regulated industry has stronger incentives to be involved in the regulation process than the general publi c. d. Regulated industries have too much economic power and can litigate away most regulation.
Dead capital refers to
A) a capital resource that lacks clear title ownership. B) a capital resource whose owner is deceased. C) a capital resource jointly owned by more than one person. D) a capital resource that has no more useful life.