Suppose that in the United States and the United Kingdom the real rate of interest is 1 percent and constant. In this case, the nominal interest rates in both countries
A) are equal.
B) differ solely by the expected future spot rate differential.
C) differ solely by the expected inflation differential.
D) differ solely by the forward rate differential.
C
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Indicate whether the statement is true or false
The recession of 2007-2009 was the most severe economic downturn in the U.S. since the
a. 1930s. b. 1950s. c. 1970s. d. 1980s.
When demand is price inelastic,
a. price and total revenue move in the same direction. b. price and total revenue move in the opposite direction. c. total revenue increases whether price goes up or down. d. total revenue decreases whether price goes up or down.
The consumer price index or CPI includes
A) The cost of a standard market basket bought by consumers in the current year. B) The cost of a standard market basket bought by consumers in the current year relative to a base period. C) The cost of a standard market basket bought by producers in the current year. D) The cost of a standard market basket bought by producers in the current year relative to a base period.