The value by which the nominal GDP of an economy exceeds its real GDP in percentage terms is equal to the:
a. rate of inflation in the economy.
b. rate of deflation in the economy.
c. GDP deflator of the economy

The problem of moral hazard that resulted from federal deposit insurance can be attributed to all of the following except

A) depositors have little incentive to monitor their bank. B) deposit premiums until recently did not depend on risk. C) risk aversion by managers of banks plus bank examination. D) the incentive of bank stockholders to increase risk because they share disproportionately in success but the FDIC shares disproportionately in failure.

Why are real interest rates more important than nominal interest rates with regard to analyzing the supply and demand of loanable funds?