If the nominal interest rate was 12 percent and the inflation rate was 10 percent in 1980, while the nominal interest rate was 7 percent and the inflation rate was 2 percent in 2001, then
a. real rates were higher in 2001.
b. real rates were higher in 1980.
c. credit was more expensive in 1980.
d. credit was cheaper in 2001 because the nominal rate was lower.
a
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________ decreases a firm's capital stock, and ________ increases its capital stock
A) Saving; depreciation B) Depreciation; investment C) Time; depreciation D) Saving; investment E) Investment; saving
Buying a diversified mutual stock fund allows you to
A) completely avoid all types of risk. B) avoid only random, unsystematic risk. C) avoid only systematic risk. D) avoid risk only when all the stock prices are perfectly correlated.
If a landlord checks a renter's credit history before renting the apartment, this is an example of ________.
A) self-revelation B) certification C) screening D) the lemons market
Suppose at a particular level of real gross domestic product (GDP), there are no unintended inventory adjustments. In this context, which of the following is true?
What will be an ideal response?