The nominal interest rate approximately equals which of the following?
A) the real interest rate minus the inflation rate
B) the real interest rate plus the inflation rate
C) the real interest rate minus the growth rate of real GDP
D) the real interest rate plus the growth rate of real GDP
B
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Which of the following is true when a Nash equilibrium is reached in a duopoly with homogeneous products?
A) Both the firms earn positive economic profits. B) Each firm charges a price equal to its average fixed cost. C) Both the firms earn zero economic profits. D) Both firms incur huge losses.
Consider the hypothetical supply and demand of Kidneys.
Initially, Kidney exchanges are regulated to donations only. This means kidneys can only be exchanged at a price of zero. What is the deadweight loss from this restriction?
A. $0
B. $825,000
C. $1,350,000
D. $1200
Free trade means that nations can buy and sell goods from each other
a. unless absolute advantage favors one nation b. without government interference, e.g., tariffs and quotas c. without having to abide by comparative advantage d. and choose their own level of tariffs against each other e. according to their own national quotas
Ambassador Bank has $5 million in deposits and $750,000 in reserves, with a reserve requirement ratio of 15 percent. If the Fed lowers the reserve requirement ratio to 12 percent, Ambassador Bank’s new excess reserves could potentially expand the money supply by ______.
a. $1,000,000 b. $150,000 c. $1,250,000 d. $250,000