If the real rate of return is 3 percent, and the inflation rate is 4 percent, then the nominal interest rate must be:
A. 1 percent.
B. ?7 percent.
C. ?1 percent.
D. 7 percent.
Answer: D
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In the above figure, a single-price monopolist charges a price of ________ and the equilibrium competitive price is ________
A) $10; $20 B) $20; $30 C) $30; $20 D) $30; $10
A perfectly competitive firm cannot affect the market price by raising or reducing its supply of a product
a. True b. False Indicate whether the statement is true or false
A country will gain relatively more from trade when
A) trade is regulated. B) the world price is close to the country's opportunity cost of the good. C) the world price is below the country's opportunity cost of the good. D) the world price is much greater than the country's opportunity cost for the good.
In a system of flexible exchange rates, a reduction in the money supply will cause
a. a rise in the value of the dollar relative to foreign currencies. b. a fall in the value of the dollar relative to foreign currencies. c. no change in the value of the dollar relative to foreign currencies. d. a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.