Suppose that lenders want to receive a real rate of interest of 5%, and that they expect inflation to remain steady at 2% in the coming years. Based on this, lenders should charge a nominal interest rate of
A. 7%.
B. 3%.
C. 5%.
D. 2%.
Answer: A
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An advance in technology which increases labor productivity will shift the:
a. labor demand curve to the left. b. MFC curve to the left. c. MP curve downward. d. labor demand curve to the right. e. product demand to the right.
What rule must be followed to obtain an efficient allocation of resources?
a. P = AC. b. P = MC. c. P = AR. d. MR = AC.
In perfect competition P = MR, but in monopoly P > MR. Why? Substantiate this statement with an example.
What will be an ideal response?
If a t-shirt manufacturer supplies 1,000 t-shirts per week when the price of t-shirts is $10 and supplies 1,200 t-shirts per week when the price of t-shirts is $12, the price elasticity of supply is 2
a. True b. False Indicate whether the statement is true or false