Suppose that in the United States and the United Kingdom the real rate of interest is 1 percent and constant. In this case, the nominal interest rates in both countries
A) are equal.
B) differ solely by the expected future spot rate differential.
C) differ solely by the expected inflation differential.
D) differ solely by the forward rate differential.
C
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Coal is required to make steel. Hence, the price elasticity of demand for coal by steel manufacturers will be
A) unit elastic. B) inelastic. C) elastic. D) perfectly elastic.
Which of the following is correct?
a. Well designed tax cuts can increase investment which fluctuates more than consumption over the business cycle. b. Well designed tax cuts can increase investment but it fluctuates less than consumption over the business cycle. c. Tax cuts have little effect on investment which fluctuate more than consumption over the business cycle. d. Tax cuts have little effect on investment but it fluctuates less than consumption over the business cycle