Katarina puts money into an account. One year later she sees that she has 6 percent more dollars and that her money will buy 4 percent more goods
a. The nominal interest rate was 10 percent and the inflation rate was 6 percent.
b. The nominal interest rate was 6 percent and the inflation rate was 2 percent.
c. The nominal interest rate was 4 percent and the inflation rate was 2 percent.
d. The nominal interest rate was 10 percent and the inflation rate was 4 percent.
b
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The current value of a business firm is the present value of all its future profits
Indicate whether the statement is true or false
Drawing on her account at Regional Bank, Samantha writes a check to Isabella, who deposits the check in her account at Local Bank. Once the check has cleared, which of the following will occur to the reserves of the banking system and the M1 money supply?
a. Bank reserves will increase; M1 will increase. b. Bank reserves will increase; there will be no change in M1. c. There will be no change in bank reserves; M1 will increase. d. There will be no changes in either bank reserves or M1.