Suppose that over the past year, the real interest rate was 6 percent and the inflation rate was 4 percent. It follows that
a. the dollar value of savings increased at 6 percent, and the purchasing power of savings increased at 2 percent.
b. the dollar value of savings increased at 6 percent, and the purchasing power of savings increased at 10 percent.
c. the dollar value of savings increased at 10 percent, and the purchasing power of savings increased at 2 percent.
d. the dollar value of savings increased at 10 percent, and the purchasing power of savings increased at 6 percent.
d
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Refer to Figure 11.2. Suppose that Ca = 40, MPC = 0.8, I = 10. Equilibrium income is
A) 40. B) 50. C) 250. D) 400.
Joe pays $8,000.00 in tuition. The 8,000 dollar tuition Joe pays is an example of what economists call
A) a relative price. B) a money price. C) an indexed price. D) an opportunity price.