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Economics, 15/e
Campbell R. McConnell, University of Nebraska, Emeritus
Stanley L. Brue, Pacific Lutheran University
Chapter 29 Rent, Interest, and Profit
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Web-Based Questions
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Web-Based Questions
- Web-Based Question: How
high is the real interest rate? The real interest
rate is the nominal rate less the rate of inflation. Assume
that the consumer price index (CPI) is a proxy for the inflation
rate and that 1-year interest rates on Treasury bills represent
the nominal interest rate. Find the current CPI at stats.bls.gov/cpi
(Percent Changes in CPI for Urban Consumers, unadjusted
12 month ending with the most current month), and then subtract
it from the current 1-year U.S. Treasury bill rate, found
at www.federalreserve.gov/
(Research and Data; Statistical Releases and Historical
Data). Repeat the process for 3 month Treasury bills and
the rate of change of the CPI for the past 3 months (compounded
annually). Is there a difference between the 3-month and
the 12-month real interest rates? If so, why?
- Web-Based Question: Corporate profits-which
industries are making the most? The Bureau of Economic Analysis provides
profit data for various industries in the United States. Go to www.bea.doc.
gov/briefrm/tables/ebr7.htm. Based on current figures, which one of the
following pairs of industry classifications has the greatest profits: (a)
financial or nonfinancial; (b) manufacturing, transportation, wholesale
trade, or retail trade; (c) durable goods or nondurable goods? During
the past year, which sectors had the largest and smallest percentage increases
in profit? Which sectors, if any, experienced losses? What are the implications
of the profit changes for expansion or contraction of the particular industries?
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