What is the exact real interest rate, when the nominal interest rate is 30 and expected inflation 26?
a. 3.0
b. 3.2
c. 3.7
d. 4.0
e. 4.2
Question 2 - In the short-run, higher prices can be caused by:
a. A decrease in aggregate supply, an increase in aggregate demand, or both.
b. A decrease in aggregate supply, decrease in aggregate demand, or both.
c. An increase in aggregate supply, increase in aggregate demand, or both.
d. An increase in aggregate supply, a decrease in aggregate demand, or both.
e. Central bank actions only.
Question 3 - What is the exact nominal interest rate, when the real interest rate is 5 and the expected inflation rate is 15?
a. 5
b. 10
c. 20.00
d. 20.75
e. 25.5
Question 4 - The analysis of the three major macroeconomic markets shows:
a. That GDP is a constant figure which is not influenced by any movements in the three markets.
b. That the three markets are uncorrelated and movements in one market are independent from movements in the other two markets.
c. That movements in one market cause predictable changes in the other two markets.
d. A) and B) are both correct.
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