If the real interest rate is above zero, we know that the nominal interest rate must be:
A. higher than the inflation rate.
B. lower than the inflation rate.
C. equal to the inflation rate.
D. zero.
A. higher than the inflation rate.
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How can the Federal Reserve actually increase the money supply?
A) by delaying transfer of money among banks B) by purchasing more government bonds in the open market C) by doubling the reserve requirement D) by raising the discount rate
The above figure shows the U.S. market for chocolate. With no international trade, producer surplus is equal to
A) area A + area B + area C + area D. B) area B + area C + area D + area E. C) area B + area C + area D. D) area C + area D. E) area E.
Refer to Figure 2-11. What is the opportunity cost of producing 1 pound of cashews in Indonesia?
A) 3/8 of a bolt of cotton B) 5/8 of a bolt of cotton C) 2 2/3 bolts of cotton D) 320 bolts of cotton
The recessionary gap is given by the difference between potential GDP and real GDP
a. True b. False Indicate whether the statement is true or false