Suppose the nominal interest rate is 4 percent annually, and you deposit $1,000. Inflation in the economy throughout the year is 5 percent. At the end of the year, you have earned:
A. a nominal increase in your savings of $40.
B. an increase in your purchasing power.
C. a real rate of return of 1 percent.
D. All of these statements are true.
Answer: A
Economics
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a. True b. False
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The Laffer curve is based on the idea that if the tax rate is sufficiently high, then raising it even more will actually reduce total tax revenues. According to Laffer, this happens because the growing tax rates reduce economic activity at an even faster rate
a. True b. False Indicate whether the statement is true or false
Economics