The Following Data Are for Macroland During 2010

question 3

Multiple Choice

The following data are for Macroland during 2010. The nominal GDP was $13.8 billion, the inflation rate was 3%, the nominal interest rate was 5.5%, and the nominal GDP growth rate was 1.5%. What was Macroland's real interest rate during 2010?

• A) 8.5%
• B) 2.5%
• C) 4%
• D) 4.5%

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Definitions:

Marginal Cost

The additional cost incurred in the production of one more unit of a good or service.

Total Revenue

The total amount of money a company receives from its business activities, calculated by multiplying the price of goods or services by the quantity sold.

Total Cost

The aggregate amount of expenses that a company or individual incurs to produce or acquire goods or services.

Short-run Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity supplied over a short period, during which at least one input is fixed.