The nominal rate of interest is 3% and the anticipated rate of inflation is 4%. What is the real rate of interest?
A) 1%
B) -1%
C) 4%
D) 9%
Answer: B
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Incompleteness of a contract can be considered boundedly rational if at the time the parties draft the agreement they do not know how they can best react to certain contingencies
Indicate whether the statement is true or false
The Depository Institutions Deregulation and Monetary Control Act passed by the Congress in 1980 led to:
a. the complete removal of thrift institutions. b. increased competition among financial institutions. c. the formation of large number of savings and loan associations. d. privatization of all financial institutions in the U.S. e. the complete removal of credit unions.
Robbery reduces economic efficiency by
a. creating voluntary exchanges b. decreasing government spending c. increasing unemployment d. creating involuntary exchanges e. lowering the number of potential Pareto improvements
Macroeconomists pay little attention to the composition of aggregate output
a. True b. False Indicate whether the statement is true or false