If the money interest rate is 7 percent and the inflationary premium 4 percent, the real interest rate is
a. -3 percent.
b. 3 percent.
c. 4 percent.
d. 7 percent.
B
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Consider a price ceiling imposed on a monopoly that is set below the competitive price. Design a diagram showing the monopoly equilibrium in this case. Use your diagram to show that a price ceiling set this low will create a shortage.
What will be an ideal response?
A firm would find it profitable to increase its production when
a. its marginal revenue exceeds its marginal cost. b. its fixed costs decrease. c. higher resource costs raise its marginal costs. d. new competitors reduce the demand for the firm's product.
The textbook uses as its precise definition of hyperinflation an inflation rate
A) below zero. B) of less than one percent per year. C) of more than one hundred percent per year. D) of more than one thousand percent per year. E) of more than fifty percent per month.
The unemployment rate in the United States at the peak of the Great Depression was ________ percent.
A. 10 B. 25 C. 20 D. 5