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Author Question: The nominal interest rate is equal to the: a. Real risk-free interest rate plus expected inflation. ... (Read 243 times)

abc

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on: Jun 30, 2018
The nominal interest rate is equal to the:
 a. Real risk-free interest rate plus expected inflation.
  b. Real interest rate plus risk premium plus tax/subsidy premium plus maturity premium.
  c. Real interest rate plus risk premium plus tax/subsidy premium plus maturity premium plus expected inflation.
  d. Real interest rate plus expected inflation.
  e. None of the above.

Question 2

Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and real GDP in the context of the Three-Sector-Model?
 a. The quantity of real loanable funds per time period falls and real GDP falls.
 b. The quantity of real loanable funds per time period falls and real GDP rises.
 c. The quantity of real loanable funds per time period rises and real GDP remains the same.
 d. The quantity of real loanable funds per time period and real GDP remain the same.
 e. There is not enough information to determine what happens to these two macroeconomic variables.


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perkiness

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Reply #1 on: Jun 30, 2018
Answer to Question 1

.D

Answer to Question 2

.A


abc

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

jojobee318

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Reply 3 on: Yesterday
Excellent

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