The expected real interest rate approximately equals
A) the nominal interest rate minus the tax rate.
B) the nominal interest rate minus the expected rate of inflation.
C) the nominal interest rate plus the expected rate of inflation.
D) the yield to maturity on a coupon bond held to maturity.
B
Economics
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Suppose that the Fed purchases $1,000,000 worth of bonds and that the reserve ratio is 25 percent. Then, the maximum potential expansion of deposits is
A) $4,000,000. B) $400,000. C) $25,000,000. D) $10,000,000.
Economics
In Chapter 11, depreciation is assumed to be
A) a fixed proportion of real GDP. B) a fixed proportion of the capital stock. C) a fixed absolute amount. D) zero. E) a fixed proportion of the capital-labor ratio.
Economics