If the nominal rate of interest is 6.5% and the inflation rate is 3.0%, what is the real rate of interest?
A) -9.5% B) -3.5% C) 1.5% D) 3.5% E) 9.5%
D
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The Federal Reserve System controls the money supply by ________.
A. making loans to private borrowers B. changing the amount of reserves the banking system has available C. making loans to the Treasury D. issuing currency
Entry of new firms into an existing market causes:
A) an upward movement along the market supply curve. B) a downward movement along the market supply curve. C) a rightward shift of the market supply curve. D) a leftward shift of the market supply curve.
In a simplified banking system, the money multiplier falls as the required reserve ratio rises
a. True b. False Indicate whether the statement is true or false
If you borrow money at a 9% nominal rate and the inflation rate is 2%, what is the real interest rate on the loan?
a. 9.0% b. 11.0% c. 7.0% d. 2.0% e. 4.5%