If you take out a mortgage with a nominal interest rate of 8% and you expect the inflation rate to be 2%, but the actual inflation rate turns out to be 8%, then you end up paying a real interest rate of

A) 0%.
B) 1%.
C) 2%.
D) 6%.


A

Economics

You might also like to view...

In the United States since 1970, the quantity of M1 money people hold as a percentage of GDP has

A) decreased. B) remained constant. C) decreased at first and then increased. D) increased at first and the decreased. E) increased.

Economics

In an open economy, injections and leakages are related as:

A) I + G = S + T. B) I + G + X = S + T + M. C) X + G = T + M. D) none of the above

Economics

A functionally organized firm is one in which

a. Various divisions perform the same task b. Various divisions perform separate tasks c. Various divisions compete with each other d. Various divisions handle the same production function

Economics

How does the deadweight loss occur in a deficiency payment program?

Economics