If the nominal interest rate was 12 percent and the inflation rate was 10 percent in 1980, while the nominal interest rate was 7 percent and the inflation rate was 2 percent in 2001, then
A. real rates were higher in 2001.
B. real rates were higher in 1980.
C. credit was more expensive in 1980.
D. credit was cheaper in 2001 because the nominal rate was lower.
Answer: A
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Which of the following is foreign portfolio investment sometimes called?
A. Hot investment B. Quick sale C. Hot money D. Wasteful investment
Related to the Economics in Practice on page 360: Suppose you see the following advertisement for a vacation rental. "Beautiful condo on the Island of Maui (Hawaii). Sleeps 5. Great landscaped grounds, pool, and BBQ area. Lanai overlooks pool. $1,500 per week." It is likely true that the condo
A. is not on the island of Maui. B. has an actual rental rate of $1600 per week. C. doesn't have a view of the pool. D. has no view other than the pool (i.e. no ocean, mountain, or city view).
Welfare data show that in the United States
a. most welfare recipients receive benefits only for a short time. b. welfare encourages young women to have children. c. children brought up on welfare tend to remain on welfare as adults. d. having poor parents does not increase the chances of a child's being on welfare as an adult. e. children of poor parents have a 50 percent chance of being middle-income adults.
During a recession, unemployment ________, tax revenue ________, and the budget deficit ________.
A. rises; falls; rises B. falls; rises; rises C. rises; rises; falls D. falls; falls; rises