Why is it important to understand the bond market?
What will be an ideal response?
The bond market supports economic activity by enabling the government and corporations to borrow to undertake their projects and it is the market where interest rates are determined.
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Which of the following statements is correct?
A) The higher the price level, the larger is the quantity of real GDP demanded. B) An increase in exports shifts the aggregate demand curve leftward. C) A tax increase shifts the aggregate demand curve leftward. D) An increase in people's expected future income shifts the aggregate demand curve leftward. E) An increase in potential GDP shifts the aggregate demand curve rightward.
For which rate of inflation given below will the real interest rate be higher than the nominal interest rate?
a. –0.5% b. 0.2% c. 0.5% d. 1.5%