If the anticipated inflation rate is 5 percent and the nominal interest rate is 9 percent, the real interest rate will be
A. 14 percent.
B. 5 percent.
C. Negative 14 percent.
D. 4 percent.
Answer: D
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The narrowest money measure is
A) currency plus non-interest bearing checking accounts. B) currency plus all checking accounts. C) currency plus all deposits at financial institutions. D) definitive money.
The economy in the period 1950 to 1998 behaved differently than the economy in the 1870 to 1940 time period. Economists explain this difference
A. in part because of the use of stabilization policy. B. because of increases in U.S. population due to the “baby boom.” C. in part because of the globalization of the economy. D. in part because of the use of competition policy.
What assumption is used when making demand curves?
a. All economic factors remain constant except price. b. All consumers lie about their purchasing habits. c. Inflation always causes product prices to rise. d. Availability of product is the most important variable.
The term "dollar votes" means:
A. inflation will occur if consumers do not spend wisely. B. government is responsible for determining what will be considered legal money. C. voters may be offered dollars to help elect certain political candidates. D. consumers "vote" for certain products to be produced by how they spend their incomes.