Suppose you have a fixed-rate mortgage with a nominal interest rate of 6% and the expected annual inflation rate over the life of the mortgage is 2%. What is the expected real interest rate?
A) 3%
B) 4%
C) 8%
D) 12%
B
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Foreign investment in poor nations often requires
A) low rates of return to ensure the poor have a fair deal. B) high rates of return to justify the high risk of such investment. C) a constantly changing political structure to enhance profit opportunities. D) the total elimination of uncertainty in order to guarantee economic profit.
A bank's assets are
A) things the bank owes to someone else. B) things owned by or owed to the bank. C) a measure of the bank's net worth. D) always greater than the bank's liabilities.
By the end of the 1960s, many countries felt that they were importing inflation from
A) the United States. B) Germany. C) France. D) Japan. E) the United Kingdom.
Refer to the accompanying table below. The average cost of 4 units of this activity is:Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225
A. $25 B. $30 C. $40 D. $20