A decrease in the real interest rate occurs when ________
A) there is an autonomous tightening of monetary policy
B) expected inflation increases, relative to the nominal interest rate
C) a decrease in autonomous spending causes a decrease in equilibrium output
D) all of the above
E) none of the above
B
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Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. Each of the countries can comply with the cartel agreement or to cheat on the cartel agreement
If all countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other countries will have economic losses of $10 million. If all countries cheat, they break even. What are the strategies in this game? A) Comply with the cartel agreement or to cheat on the cartel agreement. B) Comply with the agreement and earn $140 million in profit. C) Cheat on the cartel agreement and earn -$10 million in profits. D) Earn between $140 and $200 million in profits.
As a result of firms leaving an industry, we would expect that: a. economic profits are positive
b. as a result, economic losses are falling. c. as a result, economic losses are rising. d. both (a) and (b) are true.