The nominal (money) rate of interest
a. is the real rate of interest plus the inflationary premium.
b. can be expected to decline as inflation accelerates.
c. fell to historic lows during the 1970s when the United States experienced double-digit rates of inflation.
d. can be expected to increase when the government is running a budget surplus.
A
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To a seller, the cost of a good or service is ________, and the price is ________
A) what must be given up to produce the good or service; what is received for the good or service B) what is received for the good or service; what must be given up to produce the good or service C) the producer surplus the seller receives; the consumer surplus the buyer receives D) the producer surplus the buyer receives; the consumer surplus the seller receives E) None of the above answers is correct.
If a good has a price elasticity of demand of -3, it implies that:
A) if the income of the consumer increases by 3%, the quantity demanded of that good will increase by 1%. B) if the income of the consumer increases by 1%, the quantity demanded of that good will increase by 3%. C) if the price of the good increases by 1%, the quantity demanded of the good will decrease by 3%. D) if the price of the good increases by 3%, the quantity demanded of the good will increase by 1%.