Suppose your bank pays you 5 percent interest per year on your savings account. If prices increase by 5 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?
A) $0 B) $1 C) $3 D) $6
A
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The proponents of rational expectations and monetarism think that the Federal Reserve should adopt
A) a constant monetary growth rule. B) an interest rate target. C) a monetary aggregate target. D) an inflation target.
At its current level of quantity, a perfectly competitive firm's marginal revenue is $2.50, its short-run marginal cost is $2.50 and its long-run marginal cost is $2.00. Which of the following statements is true?
A) The firm is maximizing its long-run profit, but not its short-run profit. B) The firm should decrease its production to maximize profit in the short-run. C) The firm should increase its production to maximize profit in the short-run. D) The firm is maximizing its short-run profit, but not its long-run profit.
In 2001, the Argentine peso was overvalued relative to the U.S. dollar
a. True b. False Indicate whether the statement is true or false