If the real interest rate is greater than the nominal interest rate in an economy:
A) inflation must be negative in the economy.
B) inflation must be positive in the economy.
C) inflation must be zero in the economy.
D) the nominal interest rate must be equal to zero.
A
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At a competitive market equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities, i. consumer surplus is minimized. ii. marginal cost equals marginal benefit. iii. resources are efficiently used
iv. producer surplus is minimized. A) ii and iii B) i and ii C) i and iv D) i, ii, iii, and iv E) ii only
Bank A has $25,000 in total reserves, and zero excess reserves. The required reserve ratio is 5 percent. Bank A has total deposits of
a. $1,250. b. $25,000. c. $250,000. d. $5,000,000
The real balances effect says that an increase in the price level
A. Reduces the real value of a fixed amount of savings, consequently reducing the quantity of goods and services purchased. B. Increases the price of U.S. produced goods, causing foreign consumers to buy fewer U.S. goods. C. Increases the need to borrow, which drives up interest rates and reduces loan-financed purchases. D. Increases the price of U.S. produced goods, causing Americans to buy more imported goods.
A proprietorship is
A. a corporation that is taxed like an individual. B. a business owned by one individual who makes all of the decisions. C. two or more individuals in business together. D. a government-owned franchise.