If the CPI equaled 1.43 in 2008 and 1.56 in 2009, then between 2008 and 2009 there was:
A. deflation.
B. a recession.
C. an expansion.
D. inflation.
Answer: D
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Subtracting the inflation rate from the nominal rate of interest tells you the:
A. nominal rate of return. B. real interest rate. C. real rate of inflation. D. price level of the economy. AACSB: Analytical Thinking
When the Fed buys government bonds,
a. the money supply increases and the federal funds rate increases. b. the money supply increases and the federal funds rate decreases. c. the money supply decreases and the federal funds rate increases. d. the money supply decreases and the federal funds rate decreases.
A profit-maximizing monopsonist will hire workers up to the point at which
A. MRP = MFC. B. W = MRP = MFC. C. W = MRP. D. W = MFC.
Which of the following is a difference between stocks and bonds?
A. Stocks are issued for a fixed period; bonds are not. B. Stocks pay interest; bonds pay dividends. C. Bond payouts are more predictable than payouts from stocks. D. Bonds represent ownership; stocks represent debt.