Subtracting the inflation rate from the nominal rate of interest tells you the:
A. real interest rate.
B. price level of the economy.
C. nominal rate of return.
D. real rate of inflation.
Answer: A
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One concern regarding the North American Free Trade Agreement (NAFTA) was that it would lead:
A. unskilled workers in the United States to lose their jobs. B. wages in Mexico to rise. C. the total value of goods and services produced by the United States to fall. D. highly skilled workers in the United States to lose their jobs.
One of the most important factors for economic growth to take place is that a society must
What will be an ideal response?
Which of the following statement is correct?
A. When Marginal Product is greater than Average Product, Average Product is equal to Total Product. B. When Marginal Product is greater than Average Product, Average Product is decreasing. C. When Marginal Product is greater than Average Product, Total Product is increasing at a decreasing rate. D. When Marginal Product is greater than Average Product, Average Product is increasing.
Suppose that the interest rate paid to savers increases. As a result, Tom wishes to save less. This suggests that, for Tom,
A) the substitution effect is greater than the income effect. B) the income effect is greater than the substitution effect. C) utility maximization is not occurring. D) future consumption is a luxury.