Normally, a firm's borrowing cost is the expected real interest rate, which takes expected inflation into account. With price stickiness, however, the firm will consider only:
a. expected inflation.
b. expected wages.
c. the nominal rate of interest.
d. the expected appreciation of the asset.
Answer: c. the nominal rate of interest.
Economics
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Which of the following would both make the interest rate on a bond higher than otherwise?
a. the interest it pays is taxed and it is long term b. the interest it pays is taxed and it is short term c. the interest it pays is tax exempt and it is long term d. the interest it pays is tax exempt and it is short term
Economics
A savings account is an example of consumer income.
Answer the following statement true (T) or false (F)
Economics