If the nominal interest rate in an economy is 6% and the inflation rate in the economy is 10%, then the real interest rate is:
A) -6%. B) 10%. C) 6%. D) -4%.
D
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The money multiplier is the
A) fraction of the monetary base that is kept in currency. B) number of times that the Fed conducts open market operations in a month. C) factor by which a change in the monetary base is multiplied to give the change in the quantity of money. D) factor by which a change in the deposits base is multiplied to give the change in the monetary base. E) proportion by which a change in the quantity of money changes the monetary base.
Currency traders expect the dollar to appreciate. What impact will this have on equilibrium in the foreign exchange market?
A) The dollar will appreciate, and the equilibrium quantity of dollars will increase. B) The dollar will appreciate, and the equilibrium quantity of dollars will decrease. C) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease. D) The dollar will appreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined.
According to the law of demand, quantity demanded decreases as ________, ceteris paribus.
A. prices fall B. demand decreases C. demand increases D. prices rise
Explain how collusion makes firms better off. Given the incentives to collude, briefly explain why every industry does not become a cartel
What will be an ideal response?