If the real rate of return is 5 percent, and the inflation rate is 2 percent, then the nominal interest rate must be:
A. 7 percent.
B. 3 percent.
C. ?3 percent.
D. ?7 percent.
A. 7 percent.
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During World War II the United States' economy grew by about ________ percent a year.
A. 5 B. 10 C. 15 D. 20
A strategy of setting price below the monopoly profit-maximizing price but at the highest level that will still result in a loss for a potential entrant into the market is known as
A) entry pricing. B) contestable pricing. C) limit pricing. D) unlimited pricing.
A price may be sticky because
A) of monetary policy. B) of menu costs. C) of total factor productivity shocks. D) of the monetary illusion.
Which of the following market models results in the highest level of consumer surplus assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Cartel