If the nominal interest rate is 5 percent and the rate of inflation is 9 percent, then the real interest rate is
a. -4 percent.
b. -0.44 percent.
c. 4 percent.
d. 14 percent.
a
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Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government purchases of goods and services is $1 million, exports of goods and services to foreigners is $1 million, and imports
of goods and services from foreigners is $1.5 million. Calculate this nation's GDP.
When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:
a. greater than 1. b. equal to 1. c. less than 2. d. equal to 0.
The firm in a perfectly competitive industry
a. is a price-taker b. is a price-maker c. attempts to differentiate his/her product through advertising d. will earn an economic profit in the long run e. can charge any price it wishes
The economy’s self-correcting mechanism
A. tends to push unemployment toward a specific point called the natural rate of unemployment. B. works better at correcting inflationary gaps than recessionary gaps. C. cannot work if the Phillips curve is vertical. D. ensures that the economy will not have to endure a long period of high unemployment.