1. One negative aspect of a business cycle boom is ---------------------------------------- a. a declining rate of...
1. One negative aspect of a business cycle boom is ----------------------------------------
a. a declining rate of unemployment. b. a declining rate of inventory investment.
c. an increasing rate of inflation. d. a reduction in government budget deficits.
2. When there is high inflation
A) the nominal interest rate is approximately equal to the real interest rate.
B) the real interest rate is always greater than the nominal interest rate.
C) the nominal interest rate is always greater than the real interest rate.
D) the real interest rate is always negative.
Homework Answers
Ans
1 increasing rate of inflation as AD is quite high
2 c is right because nominal interest rate =real interest rate+inflation
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This tends to (Encourage or Discourage?) saving,
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