If the nominal interest rate is 9 percent and the real interest rate is 3 percent, then the inflation rate is

Bill lives in Montana and likes to grow zucchini. He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop, but not as much as the first layer. What economic concept best explains this observation?

a. The law of diminishing marginal utility. b. The law of diminishing returns. c. Return equalization principle. d. The principal-agent problem.

Which of the following, other things the same, would make the price level decrease and real GDP increase?

a. long-run aggregate supply shifts right b. long-run aggregate supply shifts left c. aggregate demand shifts right d. aggregate demand shifts left