Luigi is willing to lend Klaus $5,000 for one year at a nominal rate of interest of 7%. Both Luigi and Klaus expect the rate of inflation to be 2% in the next year. How much additional purchasing power will Luigi have in one year?
A. $350
B. $5,350
C. $5,250
D. $250
Answer: D
Economics
You might also like to view...
According to the expenditure approach to measuring GDP, in the United States , the largest component of GDP is
A) net exports of goods and services. B) consumption expenditure. C) government expenditure on goods and services. D) investment. E) wages.
Economics
Which of the following is NOT a divisible good?
A) gasoline B) tap water C) electricity D) movies
Economics
Charging different customers different prices is always illegal in the United States
a. True b. False
Economics
Refer to the figure above. Twelve units of this product are sold at $10 each. Producer surplus is equal to areas:
a. B+C b. A+B+C c. E+F d. D+G e. E+B
Economics