Suppose the nominal interest rate on a savings bond is 7 percent a year and the inflation rate is 4.5 percent a year. How much is the real interest rate?
A) 4.5 percent B) 1.56 percent C) 2.5 percent D) 7 percent E) 11.5 percent
C
Economics
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Which of the following statements is not compatible with the opportunity cost theory?
A) Demand plays a role in the determination of costs. B) Labor costs depend upon the demand for labor. C) Relative prices reflect the relative amount of human labor required to produce goods. D) Supply as well as demand depends upon subjective preferences.
Economics
The kind of assets banks can hold as reserves are also called the economy's
A) checkable deposits. B) money market funds. C) high-powered money. D) bankers' acceptances.
Economics