What is the approximate relationship among the real interest rate, the inflation rate, and the nominal interest rate?
What will be an ideal response?
The real interest rate equals the nominal interest rate minus the inflation rate.
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Policies to encourage higher personal saving rates include ________
A) lowering income taxes B) lowering sales taxes C) increasing the quantity of money D) raising asset prices E) reducing interest rates
If an economic change lowers the production cost of a commodity but does not reduce its market price, economic value will be created
Indicate whether the statement is true or false
Cross elasticity measures the consumer's change in demand brought about by a change in income
Indicate whether the statement is true or false
Total profit
a. is the difference between sales revenue and costs. b. maximization is always the goal of every firm. c. is always defined the same by both economists and accountants. d. is maximized when sales are maximized.