Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year. If the inflation rate was 3 percent, which of the following is the real rate of interest Marta received?
a. 10 percent
b. 5 percent
c. 3 percent
d. 2 percent
e. ?2 percent
d
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Referring to Figure 19.1, if the exchange rate is currently 14 pesos per dollar, then we expect the dollar to ________ and the peso to ________
A) depreciate; appreciate B) depreciate; depreciate C) appreciate; appreciate D) appreciate; depreciate
As a scientist, an economist's main professional objective is to become wealthy
a. True b. False
Game theory is a separate model of oligopoly therefore it is of limited value when trying to generally understand firm level behavior
a. True b. False
MegaCable and Acme are competing for an exclusive contract to provide the city of Dustin with cable television for the next year. The firm that wins the contract will earn an economic profit of $5 million. The contact will be awarded to the firm that spends the most on lobbying. If both firms spend the same amount on lobbying, then the winner will be determined by a coin flip, so each will have a 50 percent chance of winning. The socially optimal amount for each firm to spend on lobbying is ________.
A. $5,000,000 B. $2,500,000 C. $0 D. $10,000,000