Which of the following statements most accurately describes the relationship between the nominal and real interest rates?
a. The real interest rate is the expected inflation rate plus the nominal interest rate.
b. The real interest rate is the expected inflation rate minus the nominal interest rate.
c. The real interest rate is the nominal interest rate minus the expected inflation rate.
d. The real interest rate is the nominal interest rate multiplied by the expected inflation rate.
e. None of the above statements is accurate.
c. The real interest rate is the nominal interest rate minus the expected inflation rate.
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Last year your job at the university cafeteria paid you $9 an hour and the price of a music download was $1.00. This year your cafeteria job pays $9.90 per hour and download costs $1.10. You are clearly
A. worse off because of inflation. B. worse off because the download is now relatively more expensive. C. better off because your wage rate went up. D. better off because the download now costs less work.
If all issues of effort, output, and pay are fully observable and contactable between an owner and an employee, then:
A. revenues of the firm are independent of employee effort. B. the utility of the employee is unimportant to the outcome. C. incentive conflicts remain intractable. D. incentive conflicts can be eliminated.
John is maximizing utility by choosing to spend 90 minutes reading a chapter in The Theory of Moral Sentiments, which will give him 450 units of utility, instead of spending 20 minutes reading a chapter of Atlas Shrugged, which will give him 200 units of utility. (Assume marginal utility decreases slowly.)
Answer the following statement true (T) or false (F)
The supply curve of a one-of-a-kind original painting is
What will be an ideal response?