The real interest rate can be expressed as the:
a. nominal interest rate minus the real interest rate.
b. inflation rate minus the nominal interest rate.
c. nominal interest rate minus the inflation rate.
d. nominal interest rate plus the inflation rate.
c
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If Sam sells his product for $10 per unit net of costs and just breaks even after transporting it 5 miles to the market, Susan, who lives only 2 miles from the market will
a. experience lower profits b. earn a location rent c. find it profitable to purchase Sam's land d. derive a consumer's surplus e. none of the above
Within the framework of the Keynesian model, which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment?
a. The rate of inflation would decline. b. The rate of inflation would rise. c. A recession would develop. d. Interest rates would fall.