B5 If the inflation rate increases but the nominal rate of interest remains the
ID: 1203155 • Letter: B
Question
B5 If the inflation rate increases but the nominal rate of interest remains the same, the real interest rate on a bank's savings account will fall, because the real interest rate indicates how fast the true purchasing power of the account rises over time. rise, because the real interest rate indicates the true purchasing power of the account today. stay the same, because the real interest rate measures only the number of dollars in the bank account today. rise, because the real interest rate indicates how fast the number of dollars in the account rises over time. B6 Which of the following would increase productivity? an increase in human capital per worker an increase in the physical capital stock per worker an increase in natural resources per worker All of the above arc correct B7 Refer to the Aggregate Demand and Supply figure below. Suppose the economy begins in long run equilibrium at point A. If private investment spending increases due to an increase m business optimism, the economy would move from point A to point D in the short run and A in the long run E in the short run and the long run E in the short run and C in the long run. B in the short run and the long run.Explanation / Answer
B5
a. fall because the real interest rates...account rises over time.
B6
d. all of the above.
B7.
C. E in the short run and C in the long run
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.