Economics (McConnell), 18th Edition

Chapter 14: Rent, Interest, and Profit

Web-based Questions

1

WHAT ARE THE CURRENT NOMINAL AND REAL INTEREST RATES? Go to www.federalreserve.gov   (Research and Data; Statistics: Releases and Historical Data; Selected Interest Rates) and www.bankrate.com  to update the interest rates in Table 14.2 to their latest recorded values. In what direction, if any, have the interest rates changed? Find the current annual rate of inflation at www.bls.gov/cpi (Latest Numbers; CPI-U, U.S. City Average, All Items, 12-months ending with the last month). Subtract this annual rate of inflation from your updated interest rates in the table to determine the real interest rates in each category.

2

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.gov and find National Income and Product Account Table 6.16D on Corporate Profits by Industry. Based on the most-recent figures, which of the following categories 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? Compared to the same quarter a year earlier, 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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