Clicker Class 25

Clicker Class 25 - C. A decrease in the U.S. government...

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Econ 101 Class 25 Questions 1. Given the following data, what was the real rate of interest in June 2005 Date Nominal Interest Rate Growth in Prices over the Last 12 Months June, 2005 7.5 % 3 % June, 2006 8.5 % 3.5 % A. 5.5 % B. 5.05 % C. 4.5 % D. 4.0 % ** 2. Suppose the government raises its tax on corporate profits. Other tax changes also are made, such that the government’s deficit remains unchanged. This policy will _____ investment and _______the real rate of interest. A. Lower, lower ** B. Lower, raise C. Raise, lower D. Raise, raise 3. Which of the following changes will raise the equilibrium rate of interest (other factors unchanged)? A. An increase in household saving due to the aging of baby boomers. B. An increase in U.S. imports.
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Unformatted text preview: C. A decrease in the U.S. government budget deficit. D. A decrease in saving by firms. ** 4. Which of the following changes will lower the equilibrium rate of interest (other factors unchanged)? A. A decrease in household saving due to increased stock market wealth. B. An increase in exports with no change in imports. C. The onset of a recession that makes capital projects unattractive. ** D. The discovery of a new information technology. 5. If Michele nets $2.00 per patron, the price of a screen is $1,000,000, and the interest rate is 7.5 %, how many screens should Michele build? Number of Screens Number of Patrons 1 40,000 2 75,000 3 105,000 4 130,000 5 150,000 A. 1** B. 2 C. 3 D. 4 E. 5...
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