During the 1990s, Japan experienced periods of deflation and nominal interest rates that approached zero percent. Why would anyone lending money agree to a nominal interest rate of almost zero percent?
What will be an ideal response?
With deflation, the real interest rate exceeds the nominal interest rate. Lenders were making their decisions based on the higher real interest rate, not the nominal interest rate of almost zero percent.
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The term "unemployment" is best described as the total number of
A) adults who are looking for work but have not found a job. B) people not working. C) adults who work fewer hours than they wish to work. D) people who have been laid off and have stopped looking for work.
In 1980, one Zimbabwean dollar was worth 1.47 U.S. dollars. By the end of 2008, the exchange rate was one U.S. dollar to 2 billion Zimbabwean dollars
When an economy experiences rapid increases in the price level such as what occurred in Zimbabwe, the economy is said to experience A) inflation. B) stagflation. C) hyperinflation. D) deflation.
The Obama administration increased the tax on the top income tax bracket from 35% to 39%
Supply and demand analysis predicts the impact of this change was a ________ interest rate on municipal bonds and a ________ interest rate on Treasury bonds, all else the same. A) higher; lower B) lower; lower C) higher; higher D) lower; higher
The average percentage markup in the economy
a. is greater, the more competitive are market conditions b. is greater, the less competitive are market conditions c. is unaffected by the competitive conditions of the economy d. tends to be highly unstable from year to year e. tends to be stable from year to year, ensuring that the price level is stable from year to year