An expansionary fiscal policy will result in higher interest rates and will reduce private investment.

If a company pays a dividend of $2 to be received one year from now, dividends are expected to grow at a rate of 3 percent per year for the indefinite future, and the interest rate is 4 percent,

the price of the company's stock should be ________ per share. A) $3.40 B) $28.57 C) $200.00 D) $340.00

The break-even inflation rate is the

A) excess of the nominal interest rate over the TIPS interest rate. B) inflation rate that makes the nominal interest rate equal the real interest rate. C) negative of the real interest rate. D) inflation rate that is optimal according to the Friedman rule.