When the interest rate falls,
a. the opportunity cost of holding money rises
b. people shift out of holding interest-yielding asset holdings into holding money
c. the quantity of money people will hold decreases
d. investment spending decreases
e. real GDP will decrease
B
Economics
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If the expected inflation rate rises from 3% to 5% when the nominal interest rate is 4%, the Fisher effect asserts that the nominal interest rate would
A) not change. B) rise to 6%. C) fall to 2%. D) fall to 3%.
Economics
If a road is congested, then use of that road by an additional person would lead to a
a. negative externality. b. positive externality. c. Pigovian externality. d. free-rider problem with rush hour drivers stuck in traffic.
Economics