Consider two economies: A and B. The nominal interest rate is the same in both economies, but the rate of inflation is higher in economy B. Which of the following statements will then be true?
A) The real interest rate will be the same in both economies.
B) The real interest rate will be higher in economy B.
C) The real interest rate will be higher in economy A.
D) Whether the real interest rate is higher in economy A or B will depend on the number of borrowers in both economies.
C
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An efficiency wage is ________ and results in ________
A) equal to the equilibrium wage; full employment B) above the equilibrium wage; a surplus of labor C) below the equilibrium wage; a shortage of labor D) above or below the equilibrium wage; a surplus or shortage of labor
Which of the following shifts long-run aggregate supply left?
a. a decrease in either natural resources or the human capital stock. b. a decrease in the human capital stock, but not natural resources. c. a decrease in natural resources, but not the human capital stock. d. neither a decrease in natural resources nor the human capital stock.
Suppose that Canada decides to peg its dollar ($C, or the loonie) to the U.S. dollar at an exchange rate of $C1 = $US1. Will there be pressure for the Canadian dollar to change in value against the U.S. dollar as a result of the leftward shift of the U.S. IS curve?
A) Yes, the value will appreciate. B) Yes, the value will depreciate. C) No, the value will not change in value. D) Yes, but that pressure will be offset.
During a financial crisis the possibility of bank failures rose. An increase in the likelihood of a bank failing shifts demand for its stock
A. right, so the price rises. B. left, so the price rises. C. right, so the price falls. D. left, so the price falls.