Which of the following statements is correct?
a. The interest rate that is usually reported is the interest rate that has been corrected for inflation.
b. The supply of, and demand for, loanable funds depend on the real (rather than nominal) interest rate.
c. If the nominal interest rate has decreased and the real interest rate has also decreased, then the inflation rate must have decreased as well.
d. All of the above are correct.
b
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Indicate whether the statement is true or false
According to Scenario 4-1, country A has net exports of:
a. $18 million. b. $8 million. c. $13 million. d. $9 million. e. $6 million.
Suppose a subsidy is offered to consumers of education as a means of internalizing the externalities associated with education. If the subsidy accurately reflects the external benefits of education, then the new demand curve for education coincides with which other curve?
The real exchange rate is the:
A. rate at which two currencies can be traded for each other. B. nominal exchange rate adjusted for domestic inflation. C. price of the average domestic good or service relative to the price of the average foreign good or service, when prices are expressed in terms of a common currency. D. quantity of foreign currency assets held by a government for the purpose of purchasing the domestic currency in the foreign exchange market.