The 2001 recession was caused principally by
A) a slowing in the growth of the money supply.
B) a drop in autonomous consumption spending.
C) a decrease in government spending.
D) a drop in real business investment.
D
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If the nominal interest rate on a one-year loan was 7%, the actual inflation rate over the year was 3% and the expected inflation rate over the year was 2.5%, then the expected real interest rate equals
A) 4.5%. B) 4.0%. C) 3.75%. D) 3.5%.
In the economic world of production, there are either price makers or price takers. By price takers we mean that
a. firms buy goods as well as sell them, and when they buy goods at whatever price, they play the role of "takers" b. firms take control of their own markets, charging whatever price they think the market will bear c. firms take the market price as given d. firms create the price and consumers either take it or leave it e. the market takes whatever price the firms charge, which is how the downward-sloping demand curve is created