Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest. If the inflation rate was 4%, what was the real interest rate you paid?

Both the World Bank and the IMF typically

A) charge lower than average loan rates to ensure repayment. B) impose stringent preconditions that the borrowers must meet. C) charge higher than average loan rates. D) make loans for less than 5 years only.

If the supply of labor increases while demand for labor is unchanged,

A) the real wage and labor productivity will increase. B) the real wage will decrease and labor productivity will increase. C) the real wage will increase and labor productivity will decrease. D) the real wage and labor productivity will decrease.