The difference between the money rate of interest and the real rate of interest is often called the
a. real balance effect.
b. prime interest rate.
c. inflationary premium.
d. discount rate.
C
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Phil Harrison is a welder who works on skyscrapers and extension bridges. Phil's brother William is also a welder but he works in a manufacturing plant where he does all of his welding on ground level
Which of the following would not explain why Phil earns a higher wage than his brother? A) cognitive dissonance B) Phil's marginal revenue product is greater than William's marginal revenue product. C) Phil has greater experience as a welder than his brother has. D) Phil's job is more hazardous than William's job.
If a perfectly competitive firm made an economic profit in the short run, but not in the long run, it must be true that
a. prices for inputs increased b. demand declined c. new firms entered, supply increased, and price fell d. accounting profit exceeds economic profit e. labor costs are increasing