The real interest rate can be approximated by
a. adding the nominal interest rate and the inflation rate
b. subtracting the nominal interest rate from the inflation rate
c. adding last year's nominal interest rate to this year's
d. subtracting the inflation rate from the nominal interest rate
e. none of the above
D
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Firms in a small economy anticipated that inventories would grow over the past year by $500,000. Over that year, inventories actually grew by only $400,000. This implies that
A) there was a planned increase in inventories that year. B) aggregate expenditure that year was greater than GDP that year. C) aggregate expenditure that year was equal to GDP that year. D) there was an unplanned increase in inventories that year.
Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 3.5%; scenario B has an average annual growth of 4.5%. The nation's real GDP would double in about:
A. 20 years under scenario A, versus 30 years under scenario B B. 20 years under scenario A, versus 16 years under scenario B C. 12 years under scenario A, versus 16 years under scenario B D. 16 years under scenario A, versus 30 years under scenario B