Assume you save $1,000 in a bank account that pays 8 percent interest per year and the inflation rate is 3 percent. At the end of the year you have earned
A) a nominal return of $50.
B) a negative real return.
C) a real return of $50.
D) a real return of $80.
C
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The investment demand curve is drawn with the ________ on the horizontal axis and the ________ on the vertical axis.
A. expected rate of return and interest rate; amount of investment B. amount of investment; disposable income C. amount of investment; expected rate of return and interest rate D. disposable income; amount of investment
The opportunity cost of an action is:
a. the monetary payment the action required. b. the total time spent by all parties in carrying out the action. c. the value of the best opportunity that must be sacrificed in order to take the action. d. the cost of all alternative actions that could have been taken, added together.
If the price of output? increases, the marginal revenue product curve will shift? ________ and the profit maximizing quantity of labor demanded will? ________.
A.
?down; decrease
B.
?up; decrease
C.
?down; increase
D.
?up; increase
Insurance policies can be bought to cover unexpected costs due to which kind of risk?
A. Fire damage to your home B. Automobile theft C. Fighting a rare disease D. Individuals can buy insurance to cover all these risks.