Suppose That Over the Past Year,the Real Interest Rate Was

question 110

Multiple Choice

Suppose that over the past year,the real interest rate was 6 percent and the inflation rate was 4 percent.It follows that

• A)the dollar value of savings increased at 6 percent,and the purchasing power of savings increased at 2 percent.
• B)the dollar value of savings increased at 6 percent,and the purchasing power of savings increased at 10 percent.
• C)the dollar value of savings increased at 10 percent,and the purchasing power of savings increased at 2 percent.
• D)the dollar value of savings increased at 10 percent,and the purchasing power of savings increased at 6 percent.

---

Definitions:

Marginal Product

The additional output resulting from one more unit of a given input, holding all other inputs constant.

Average Product

The output per unit of input, measured by dividing the total product by the quantity of input.

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.

Marginal Product

The additional output that is produced by adding one more unit of a particular input, keeping other inputs constant.