If the nominal interest rate is 6% and the inflation rate is 2%, then the real interest rate is
A) 8%.
B) 4%.
C) 3%.
D) 2%.
E) 1%.
Answer: B
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If the case study on U.S. / China trade is correct in its analysis of factor abundance,
A) Chinese capital owners should see their income rise as trade increases. B) U.S. skilled labor inputs should see their incomes fall as trade increases. C) U.S. capital owners should see their income fall as trade increases. D) Chinese unskilled labor should see their income rise as trade increases.
The rate of inflation in Vroomka, a small island country, was 12.3 percent last year. The value of the GDP deflator of the country last year was _____
a. 100.23 b. 123.00 c. 112.30 d. 87.70
If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would
a. increase by less than $5. b. increase by exactly $5. c. increase by more than $5. d. decrease by an indeterminate amount.
Give an example of cross-price elasticity of demand that involves a substitute and another that involves a complement. Calculate a sample cross-price elasticity of demand for each.
What will be an ideal response?