If you borrow money at a 9% nominal rate and the inflation rate is 2%, what is the real interest rate on the loan?
a. 9.0%
b. 11.0%
c. 7.0%
d. 2.0%
e. 4.5%
C
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Firms in perfectly competitive markets who wish to maximize profits ought to produce:
A. where marginal revenue equals market price. B. as many units as their scale allows. C. at capacity and plan to expand in the long run. D. where total profit is the greatest.
If the United States has a $300 billion trade deficit, then there must be:
A. no capital inflows or capital outflows. B. net capital outflows of $300 billion. C. net capital inflows of $300 billion. D. net capital inflows of -$300 billion.
At the Larson Bakery the marginal products of the first, second, and third sales clerks are 20, 17, and 11 customers served, respectively. The total product (number of customers served) of the three sales clerks is
A. 11. B. 40. C. 46. D. 48.
Refer to the Article Summary. When Fed Chair Janet Yellen announced that a rate increase would be warranted by the end of the year, she was was referring to the
A) required reserve rate. B) long-term real rate of interest. C) prime rate. D) federal funds rate.