If expected inflation is constant, then when the nominal interest rate increases, the real interest rate
a. increases by more than the change in the nominal interest rate.
b. increases by the change in the nominal interest rate.
c. decreases by the change in the nominal interest rate.
d. decreases by more than the change in the nominal interest rate.
b
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Which incentive scheme would simultaneously elicit accurate information about feasible plant production levels and motivate managers to perform up to potential (in the following schemes, B is the bonus payment, Q is actual plant output, and Qf is the
manager's estimate of feasible output)? A) B = 0.4Q B) B = 0.4(Q - Qf) C) B = 0.4Qf + 0.3(Q - Qf) if Q > Qf D) B = 0.4Qf - 0.6(Q - Qf) if Q < Qf E) B = 0.4Qf - 0.6(Q - Qf) if Q > Qf
Suppose that televisions are produced both domestically and abroad. What would a ban on imported televisions do to the price of televisions, the quantity of televisions, and the output of the domestic television industry?
What will be an ideal response?