Which of the following situations is likely to determine an

Which of the following situations is likely to determine an increase in real GDP per capita in the US? Which of the followings is correct? Suppose the nominal interest rate is 2% and inflation is -1% (deflation). The real interest rate is

Solution

8. Which of the following situations.. increase in real GDP per capita in the U.S.?

a) An increase in total real GDP in the economy, while the U.S. population does not change.

9. Which of the following is correct?

b) The real interest rate is the difference between the nominal interest rate and inflation.

10. Suppose the nominal interest rate is 2% and inflation is -1% (deflation). The real interest rate is:

d) 3%.

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