Suppose you are a borrower and you expect inflation to be 6 percent over the next year because inflation was 6 percent in the last year. If you do not want to pay more than 2 percent in real terms for any loan you take out, you will not borrow if the interest rate is greater than:
A. 8 percent.
B. 6 percent.
C. 30 percent.
D. 2 percent.
Answer: A
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Refer to Table 7.1. In this simple economy, M1 equals
A) $2,500. B) $2,600. C) $4,800. D) $12,400.
When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is important to recognize that the market price includes a margin above marginal cost b. It is OK if the product on the market includes costly features your downstream division does not use c. It is OK if the product on the market is inexpensive because its quality is lower than you use d. If it is similar enough, it is justification for you producing it in-house
Answer the following question based on the information given below: Deposits at the central bank = 400 U.S. Government Securities = 600 Checking Deposit = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the central bank = 250 Cash in the Vault = 150 If the reserve requirement is 10%, the level of excess reserves equals:
a. 495 b. 310 c. 550 d. 380 e. Cannot be determined with this information.
A budget deficit
A) occurs when government expenditures exceed tax revenues. B) occurs when tax revenues exceed government expenditures. C) occurs when transfer payments exceed tax revenues. D) will always result when Congress and the president cannot agree on expenditures. E) occurs when monetary policy works in the opposite direction of fiscal policy.