You borrow $10,000 from a bank for one year at a nominal interest rate of 5%. If inflation over the year is 2%, what is the real interest rate you are paying?
A) 2%
B) 2.5%
C) 3%
D) 5%
Answer: C
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The purchase of fifty new food-processing machines by the Campbell Soup Corporation would be classified as investment spending
a. True b. False Indicate whether the statement is true or false
A firm sells 100 units of output and its total revenue is $800 . The firm's average revenue amounts to __________
Fill in the blank(s) with correct word
In the fall of 2008, the Federal Reserve reduced its target for the federal funds rate dramatically. The Fed likely made this decision because it believed:
A. there was threat of a recession and was trying to stimulate the economy. B. inflation might become a problem and was moving to head it off. C. savers are not being given enough encouragement to save. D. unemployment was too low and needed to be boosted.
If a country’s productivity doubles for everything it produces, this will not alter its prior pattern of specialization because it has not altered its comparative advantage.
Answer the following statement true (T) or false (F)