Suppose you have $400 and the inflation rate is 5 percent. In order to earn a real return of $16 on your investment, the nominal interest rate needs to be near
A) 0 percent. B) 4 percent. C) 6 percent. D) 9 percent.
D
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The coupon rate on newly issued bonds is usually ________ for bonds with favorable tax treatment, such as municipal bonds, and ________ for bonds that are very risky, such as junk bonds.
A. lower; lower B. lower; higher C. higher; lower D. higher; higher
In the Keynesian model in the short run, an increase in the money supply will cause
A) an increase in output and a decrease in the real interest rate. B) a decrease in the real interest rate but no change in output. C) an increase in the real interest rate and an increase in output. D) no change in either the real interest rate or output.
Which of the following explains the recent decline in union membership in the United States?
a. smaller government safety nets b. slower technological change c. the change from a manufacturing to a service-based economy d. increasing market concentration e. none of the above
U.S. imports are
a. not added to U.S. GDP because they are produced abroad b. added to U.S. GDP because they are consumed domestically c. added to U.S. GDP because they represent an increase in inventories d. added to U.S. GDP as government purchases because the government decides what goods may be imported e. not added to U.S. GDP because they are intermediate goods