People expect an inflation rate of 5 percent and the real ...

[K@]

People expect an inflation rate of 5 percent and the real interest rate is positive. Consequently the nominal interest rate will be
 
  A) more than 5 percent.
  B) 5 percent.
  C) less than 5 percent.
  D) Without more information it is impossible to tell if the nominal interest rate will be more than, less than, or equal to 5 percent.

Question 2

The aggregate production function shows how ________ varies with ________.
 
  A) leisure time; labor
  B) labor; leisure time
  C) real GDP; labor
  D) labor; capital

[mrphibs]

Answer to Question 1

A

Answer to Question 2

C