To convert the nominal interest rate to the real interest rate, we
A) divide the nominal interest rate by the inflation rate.
B) multiply the nominal interest rate by the inflation rate.
C) subtract the inflation rate from the nominal interest rate.
D) add the inflation rate to the nominal interest rate.
E) subtract the nominal interest rate from the inflation rate and then multiply by 100.
C
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Suppose you inherit the only spring of mineral water in an area and want to maximize profits from this costless product. You would ask your customers to bring their containers with them and:
a. charge them the highest price possible to sell some output. b. charge them the lowest price possible to sell as much as you can. c. ask them how much they would like to pay and accept it. d. charge the price at which MR is zero. e. charge the price at which MR is maximum.
A reserve currency is a currency that is:
a. used exclusively to settle domestic debts. b. specifically designed for use by commercial banks to settle accounts. c. held only by bureaucrats. d. used to settle international debts by private corporations. e. held by governments to facilitate foreign exchange market interventions.