If the CPI is 170 at the beginning of the year and 181 at the end, and a bank is paying a nominal interest rate of 6 percent, we see that
A) the real interest rate is positive and is less than 1 percent.
B) the interest nominal rate is negative.
C) the real interest rate is negative.
D) the real interest rate is positive and is larger than 1 percent.
E) the real interest rate is equal to zero.
A
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When would it be plausible to describe the demand for a product by drawing a straight line, Q = a - bP?
A. Only if no important factors other than price affect demand B. In the vast majority of scenarios C. Practically never D. If we believe that factors other than price alone determine demand
Everything else held constant, if income tax rates were lowered, then
A) the interest rate on municipal bonds would fall. B) the interest rate on Treasury bonds would rise. C) the interest rate on municipal bonds would rise. D) the price of Treasury bonds would fall.