What is the exact real interest rate, when the nominal interest rate is 30% and expected inflation 26%?
a. 3.0%
b. 3.2%
c. 3.7%
d. 4.0%
e. 4.2%
.B
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The ceteris paribus assumption is used in economic analyses in order to: a. cover special cases
b. include all relevant factors. c. add realism. d. keep the relationship between the two variables isolated from other events.
A theory is an untested assertion of alleged fact.
Answer the following statement true (T) or false (F)
Taxes and government spending that affect fiscal policy without specific action from policymakers are called:
A. automatic stabilizers. B. expansionary fiscal policy. C. contractionary fiscal policy. D. discretionary fiscal policy.
Politics enters into the determination of economic policy in a negative way because:
A. it does not take market failures or failures of market outcome into account in formulating policy. B. political decisions do not always reflect the will of society. C. political decisions always reflect the will of society. D. it takes market failures and failures of market outcome into account in formulating policy.