If the nominal interest rate is 7 percent and the rate of inflation is 3 percent, then the real interest rate is
a. 7 percent.
b. 4 percent.
c. 3 percent.
d. 10 percent.
b
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Four countries, A, B, C, and D, have comparable economies. The average value of the GDP deflator in the last 12 years for Countries A, B, C, and D were 133, 122, 166, and 142, respectively. Among the four countries, which country has the most stable economy?
a. Country A b. Country B c. Country C d. Country D
Interest rate
What will be an ideal response?
Deciding what the distribution of income should be is an example of normative economics.
Answer the following statement true (T) or false (F)
Figure 4-11 Refer to . On the Laffer curve shown, which of the following is true?
a. Tax revenue would increase if marginal tax rates were lowered from point C.
b. Tax revenue would decrease if marginal tax rates were lowered from point A.
c. Tax revenues are maximized at a tax rate corresponding to point B.
d. All of the above are true.