The real cost of borrowing is unchanged when the ________ interest rate and the ________ rate increase by the same amount.
A. real; inflation
B. real; nominal interest
C. nominal; inflation
D. nominal; real interest
Answer: C
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If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________
A) 10.0 B) 6.0 C) 0.25 D) 16.0 E) 4.0
What is the meaning of the term marginal cost?
a. The cost of producing an average unit b. The cost of the first and last units c. The cost of producing one more unit d. The total cost of all units produced
In 2008, interest rates on Treasury securities fell even though most other interest rates were rising.
Answer the following statement true (T) or false (F)
Which of the following would not be expected to occur in a purely competitive market in long- run equilibrium?
A. Consumer and producer surplus will be minimized. B. P = MC = lowest ATC. C. The maximum willingness to pay for the last unit equals the minimum acceptable price for that unit. D. We would expect all of these to occur in the long run in a purely competitive market.