201-210
The nominal interest rate equals the:
real interest rate plus the rate of inflation.
Unanticipated inflation:
reduces the value of money.
Refer to the accompanying figure on the labor market. The level of employment at the equilibrium wage rate is:
$100,000
Refer to the accompanying figure on the labor market. The equilibrium wage rate is:
$15
Refer to the accompanying figure on the labor market. The unemployment rate at the equilibrium wage rate is:
0%
Refer to the accompanying figure on the labor market. The size of the labor force at equilibrium wage rate is:
100,000.
Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is equal to:
4%.
Which of the following is true?
Unexpected inflation benefits borrowers and hurts lenders.
Menu costs of inflation are the:
costs associated with businesses changing prices.
Menu costs refer to the increased cost:
of changing listed prices.