Initially, the nominal rate of interest is 8 percent and inflation is 4 percent. The nominal interest rate then rises to 12 percent and the inflation rate to 8 percent. It follows that the real rate of interest has
a. fallen.
b. remained the same.
c. risen to 8 percent.
d. risen to 10 percent.
B
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The United States uses tax funds to build and repair the interstate highway system and to provide health care services via Medicare. Suppose Medicare services are on the horizontal axis and highway miles are on the vertical axis of a PPF
If the government decides to reduce funding to Medicare, this change would be shown as A) a shift out of the PPF. B) the PPF becoming flatter. C) a movement down along the PPF. D) a movement up along the PPF.
When using the terms "total utility" or "marginal utility" we assume:
a. the consumer will exchange one commodity for another b. the consumer will part with money for the commodity c. the consumer has declined to purchase the commodity d. a and b are correct
Which of the following would be a legitimate government activity in the U.S. economy?
A. The regulation of water pollution. B. The enactment of antitrust laws to protect consumers. C. Enforcing child labor laws. D. All of the choices are correct.
Suppose the market for potatoes can be expressed as follows: Supply: QS = -20 + 10p Demand: QD = 400 - 20p Solve for the equilibrium price and quantity
What will be an ideal response?