Let: (1 ) Pt be the price of one unit of a market basket of goods (i.e., a composite commodity) in year t; (2 ) Pet + 1 be the expected price of one unit of a market basket of goods in year t + 1; (3 ) ?et + 1 be the expected rate of inflation between period t and t + 1; and (4 ) it be the one-year nominal interest rate. Suppose an individual borrows the equivalent of one unit of a composite
commodity today. Given this information, which of the following expressions represents (i.e., is equal to) the real interest rate (rt)?
A) (1 + it)(Pet+1)/(Pt)
B) (1 + ?et+1)/(1 + it)
C) {(1 + ?et+1)/(1 + it)} - 1
D) {(1 + it)(Pt)/(Pet+1)} - 1
E) none of the above
D
Economics
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Refer to the figure above. How many chairs were imported by Lithasia before the tariff was imposed by the government?
A) 25 units B) 50 units C) 55 units D) 60 units
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