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 2011, then
What will be an ideal response?
real rates were higher in 2011
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Which of the following is most likely to be an example of causation?
A) A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future. B) A soccer player scores 4 goals when he wears red socks. He concludes that the red socks helped him score the goals. C) A firm producing CFLs installs new machinery. The per-day production of CFLs increases. D) The crime rate is high in a country. The literacy rate is high as well.
In New York City, about 1 million apartments are subject to rent control by the local government. Rent control
A) puts a legal limit on the rent that landlords can charge for an apartment. B) is a government policy which limits apartment rental to those people whose incomes are less than $50,000 per year. C) is a price floor which sets a minimum rent for apartments. D) only applies to those apartments which are owned and rented out by the local government.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples, how will the equilibrium point change?
A) There will be no change in the equilibrium point. B) The equilibrium point will move from A to B. C) The equilibrium point will move from A to C. D) The equilibrium point will move from A to E.
Assume that recent oil exploration coupled with a fall in demand reduced petroleum imports of a nation to zero. We can expect:
a. the domestic price of petroleum to fall below the world price. b. the world price of petroleum to fall to equal the domestic price. c. petroleum exported by the domestic producers to increase. d. petroleum exported by the domestic producers to decrease.