A. Today you make an investment of $500 with a nominal interest rate of 6% compounded annually. You expect the rate of inflation to be 2% each year over the next three years. What is the real interest rate you will make on your investment? What is the future value of your investment in three years?
B. Compare Perfect competition, monopoly and monopolistic competition. How are these three types of markets similar? How are they different? (Hint: Do not just list the definitions of these types of competitive markets. Be specific in how they are alike and how they are different, and use examples to illustrate your answer.)