If the nominal rate of interest on a bond was 7 percent, the inflation rate was 6 percent and an individual was in a 50-percent tax bracket, the after-tax real return on the bond would be equal to
a. 0 percent.
b. .5 percent.
c. 6 percent.
d. 7 percent.
e. none of the above.
B
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Using the Lorenz curve, the degree of income inequality is measured by the:
a. line connecting all points for which a given percentage of families receives exactly that cumulative percentage of income. b. distance of the Lorenz curve from the line of perfect equality. c. flat diagonal line that applies to a perfectly elastic demand curve. d. number of times the Lorenz curve crosses the line of perfect equality.
Suppose that U.S. savers decide that holding Brazilian assets has become riskier. What happens to U.S. net capital outflow? What happens to the U.S. real interest rate?
Economic models are used to:
A. explain every detail of an economic theory. B. explore decision making by individuals, firms and other organizations. C. build physical renditions of government construction projects. D. represent the complexities of economic environments.
Suppose that a market for a product is in equilibrium at a price of $3 per unit. At any price below $3 per unit:
A. there will be an excess demand for the product. B. there will be an excess supply of the product. C. the quantity demanded of the product will be less than the quantity supplied of that product. D. there will be a surplus of that product.