The nominal rate of interest = _____ + _____.
Fill in the blank(s) with the appropriate word(s).
the real interest rate; the expected rate of inflation
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Who among the following benefits from inflation?
a. Patrick Roy who borrowed $10,000 from a bank to pay the downpayment on a house he bought in Denver b. The Denver National Bank who provided Patrick Roy with the $10,000 to make the downpayment c. Jerry Swanson, a landlord who holds a 5-year lease on an apartment rented to students off campus at the University of Arizona d. Peter Schran who loaned Larry Neal $500 without charging Larry any interest e. Ian McDonald who is retired and lives on his $700 per week pension
If the quantity of loanable funds supplied is less than the quantity demanded, then there is a
a. shortage of loanable funds and the interest rate will fall. b. shortage of loanable funds and the interest rate will rise. c. surplus of loanable funds and the interest rate will fall. d. surplus of loanable funds and the interest rate will rise.
A firm's long term supply function is the segment of the marginal cost above the average fixed cost curve.
a. true b. false
When OPEC reduces output to keep prices high, OPEC is acting as a:
A. producer moving along a supply curve, cutting output as price falls. B. producer in a contestable market. C. price taker. D. cartel.