Celia wants to make an 8% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge an interest rate of
A. 3%.
B. 5%.
C. 8%.
D. 13%.
Answer: D
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Protectionism refers to:
A) subsidizing imports. B) reduction of trade barriers. C) increased export of goods and services. D) reducing the competition faced by domestic firms.
In the figure above, a decrease in the quantity of oil supplied but NOT a decrease in the supply of oil is shown by a movement from
A) point a to point e. B) point a to point b. C) point a to point c. D) point a to point d.
According to the Keynesian model, real wages should
A) remain constant. B) fall during recessions. C) rise during recessions. D) stay the same during recessions but rise during expansions.
Which of the following statements is correct, when the exchange rate changes from €2/$ to €1.5/$?
a. Both the euro and the dollar depreciate. b. The euro (€) depreciates. c. The euro depreciates and the dollar appreciates. d. The euro appreciates and the dollar depreciates. e. None of the above.