If the nominal interest rate is 4 percent and the expected inflation rate is 1 percent, the real interest rate is
A) 3 percent.
B) 5 percent.
C) 4 percent.
D) 1.50 percent.
E) 0.25 percent.
A
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Jason is considering buying stock in a grocery store chain that is going public. He predicts this company will be very profitable. When he buys shares in the company:
a. he will have gained capital. b. he can sell them again through an initial public offering. c. he is agreeing to repay the capital and the interest over a period of time. d. he will own a small percentage of the company.
Which of the following is correct? In the 1990's
a. the Fed maintained low inflation because it had to follow a policy rule. b. the Fed maintained low inflation even without being required to follow a policy rule. c. the Fed was not required to follow a policy rule and let inflation move higher. d. the Fed was required to follow a policy rule, but it provided the Fed enough discretion that inflation moved higher.
The movement of workers between jobs, firms, and industries is called:
A. the demand for labor. B. the supply of labor. C. diminishing returns to labor. D. worker mobility.
In January the price of widgets was $1.00, and Wendy's Widgets produced 80 widgets. In February the price of widgets was $1.50, and Wendy's Widgets produced 110 widgets. In March the price of widgets was $2.00, and Wendy's Widgets produced 140 widgets. The price elasticity of supply of Wendy's Widgets was about
a. 0.79 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00. b. 1.27 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. c. 0.79 when the price increased from $1.00 to $1.50 and 1.19 when the price increased from $1.50 to $2.00. d. 1.27 when the price increased from $1.00 to $1.50 and 0.84 when the price increased from $1.50 to $2.00.