If an individual has $10,000 in a savings account paying 3% and the inflation rate is 2%, the nominal interest rate is
A) 3% and the real rate is 5%.
B) 5% and the real rate is 7%.
C) 5% and the real rate is 3%.
D) 3% and the real rate is 1%.
E) 5%.
D
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If a bank has total reserves of $40,000 and a 20 percent reserve requirement, then the maximum amount of demand deposits the bank can have if excess reserves are zero is
a. $100,000 b. $80,000 c. $300,000 d. $20,000 e. $200,000
A firm charges a price so low that it prevents other firms from entering the market. This is an example of:
A. a tying contract. B. limit pricing. C. price discrimination. D. predatory pricing.
The demand for a monopoly's output is p = 100 - Q. The firm's production function is Q = 2L. Which of the following is the firm's demand for labor?
A) w = 200 - 8L B) w = 200 - 4L C) w = 100 - L D) w = 2L
Saving time by driving faster is an example of a ________ of driving faster. Increasing the severity of injuries from a potential accident due to driving faster is a(n) ________ of driving faster.
A. nominal cost; real cost B. marginal cost; nominal cost C. marginal benefit; marginal cost D. normative benefit; opportunity cost