If the nominal interest rate on a one-year loan was 7%, the expected inflation rate over the year was 3% and the actual inflation rate over the year turned out to be 3.5%, then the expected real interest rate equals
A. 3.75%.
B. 4.0%.
C. 3.5%.
D. 6.5%.
Answer: B
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If a good has an external cost, the
A) unregulated competitive market outcome is efficient. B) marginal private cost reflects the external cost. C) unregulated competitive market outcome is inefficient. D) marginal social benefit is equal to the marginal social cost when the market is in equilibrium. E) external benefit must equal the external cost.
Expansionary fiscal policy includes an increase in government spending, a decrease in taxes or some combination of the two
Indicate whether the statement is true or false
Refer to the above table. If opportunity costs are constant, residents of the United States will gain from specializing and trading with Switzerland if the
A) produce both clocks and films and export clocks to Switzerland. B) produce both clocks and films and export both to Switzerland. C) import films and export clocks to Switzerland. D) import clocks and export films.
Supply-siders' policy recommendations include:
a. lower tax rates, spending cuts, and increased government regulation. b. lower tax rates, lower resource prices, and decreased government regulation. c. lower tax rates, spending increases, and decreased government regulation. d. lower tax rates, spending increases, and increased government regulation. e. higher tax rates, spending cuts, and decreased government regulation.