The real rate of interest
A) is equal to the nominal rate when Y equals YN.
B) is equal to the nominal rate minus the rate of inflation.
C) is equal to the nominal rate plus the rate of inflation.
D) is never negative.
B
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Without any change in the demand for labor, how are the following events likely to change the equilibrium wage and employment level in a dairy farm?
a) An increase in the population of the region where the dairy farm is located b) The establishment of a cotton mill that pays higher hourly wages, near the dairy farm c) The shutdown of a rice farm located near the dairy farm
Roger owns a small health store that sells vitamins in a perfectly competitive market. If vitamins sell for $12 per bottle and the average total cost per bottle is $12.50 at the profit-maximizing output level, then in the long run
a. more firms will enter the market. b. some firms will exit from the market. c. the equilibrium price per bottle will fall. d. average total costs will fall.