A reserve requirement of 10 percent means a money multiplier of:
a. 1

Refer to the scenario above. What is Wendy's opportunity cost of producing one greeting card?

A) 0.25 earrings B) 0.5 earrings C) 1 earring D) 2 earrings

The real rate of interest will approximately be equal to

A) the nominal interest rate plus the expected rate of inflation. B) the stated rate of interest in a high-inflation economy. C) the nominal interest rate minus the expected rate of change in the price level. D) the stated rate minus the opportunity cost of capital.