If the short-term nominal interest rate is 3.4%, the term structure effect is 1.2%, the default-risk premium is 1.4%, and the expected rate of inflation is 2.7%, the long-term real interest rate will be
A) -1.9%.
B) 0.5%.
C) 3.3%.
D) 8.7%.
C
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An increase in the price of a resource will cause a rightward shift of its supply curve
a. True b. False
When the U.S. decides to strengthen its border control, the labor market in California is affected. We would expect the:
A. demand for labor to decrease. B. supply of labor to decrease. C. demand of labor to increase. D. supply of labor to increase.
If the United States experiences an economic boom, compared to other countries, how will this affect the value of the U.S. dollar?
a. It will fall because other nations would be forced to raise their interest rates. b. It will fall because the United States will import more goods and services, leading to an increased supply of dollars. c. It will rise because U.S. GDP would be rising faster than other countries. d. It will rise because the Fed will have to lower U.S. interest rates.
In a two-country framework, if the opportunity cost of producing a good is equal in both countries, _____
a. trade will favor the country with better technology b. trade is not possible between the countries c. trade will be equally beneficial to both the countries d. trade will favor the country with a greater labor force