If the inflation rate is 5% and the nominal interest rate is 4%, then the real interest rate is around
A. 1%.
B. 9%.
C. 20%.
D. -1%.
Answer: D
You might also like to view...
Refer to the scenario above. Which of the following is likely to happen if the service center has a reputation of trustworthiness?
A) You will trust the mechanic and he will cooperate. B) You will trust the mechanic but he will defect. C) Neither of you will gain from trade. D) Only the mechanic will gain.
Which of the following policies would not help promote economic growth?
A) a law restricting elected officials from accepting expensive gifts and trips from private individuals B) a law that subsidizes research in nanotechnology C) a law that funds prenatal care for all expectant mothers D) a law requiring that the funds in an individual retirement account be taxed
Historical data on prices and quantities sold do not provide the basis for drawing an accurate demand curve because
a. reporters who gather these data are often wrong. b. factors other than price may change over time. c. they do not include measures of price close to the quantity axis. d. they sometimes tend to be clustered around one point.
Which of the following statements regarding growth was brought out from the material in Chapter 15?
A. There is no correlation between the volatility in growth rates and annual output growth. B. Stability results in higher output growth rates. C. The more volatile the growth rate, the higher is the annual output growth. D. Inflation volatility results in higher output growth rates.