Which of the following would cause the real interest rate to be negative?
a. When the nominal interest rate is greater than the inflation rate
b. When the nominal interest rate is greater than the rate of deflation
c. When the nominal interest rate is smaller than the rate of deflation
d. When the nominal interest rate is smaller than the inflation rate
e. When the nominal interest rate is equal to the inflation rate
D
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Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage
a. increases, and the equilibrium quantity of labor increases. b. increases, and the equilibrium quantity of labor decreases. c. decreases, and the equilibrium quantity of labor increases. d. decreases, and the equilibrium quantity of labor decreases.
Suppose that you own a monopolistically competitive firm. Using the three-step method, calculate whether your company is making economic profits, economic losses, or zero profits. Use hypothetical numbers for your calculations. Do not use examples or numbers from the text.
What will be an ideal response?