w10-112x-v2

# It should therefore lend its money at a nominal

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Unformatted text preview: oney at a nominal interest rate of A) ten percent. B) nine percent. C) five percent. D) four percent. E) one percent. 18) In Shoetown, a rancher takes \$0 worth of inputs and produces animal skins, which he sells to the tanner for \$400. The tanner then sells leather to the shoemaker for \$700, and the shoemaker then sells \$1 200 worth of shoes. The value added from these transactions is A) \$ 800. B) \$1 000. C) \$1 200. D) \$2 300. E) \$2 500. 4 FIGURE 21-1 19) Refer to Figure 21-1. The marginal propensity to save is given by B) DE/Y2 Y3. C) DF/Y2 Y3. A) DE/Y1 Y3. D) FE/Y1 Y3. E) FE/Y2 Y3. 20) If the Consumer Price Index changes from 120 in year one to 144 in year two, the rate of inflation in the intervening year is A) 10 percent. B) 12.5 percent. C) 20 percent. D) 25 percent. E) 30 percent. 21) Consider a simple macro model with demand-determined output. If desired aggregate expenditure is greater than actual national income, then A) inventories will likely begin to fall, causing firms to increase production. B) actual output must be less than th...
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## This test prep was uploaded on 03/13/2014 for the course ECON 101 taught by Professor Vanderwaal during the Fall '08 term at Waterloo.

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