If the real rate of return is 2 percent, and the inflation rate is 2 percent, then the nominal interest rate must be:
A. ?4 percent.
B. ?2 percent.
C. 4 percent.
D. 2 percent.
Answer: C
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The exchange rate is
a. the rate at which one currency is traded for another b. always constant c. the tax a foreign nation imposes to change its currency into dollars d. irrelevant to those who do not travel to foreign countries e. controlled by the Federal Reserve
Which is the most important form of business organization in terms of total sales?
a. Sole proprietorship b. Corporation c. Partnership d. Cooperative
Which of the following is an intangible good?
a. a television b. a reputation c. a smartphone d. a textbook
The multiplier effect occurs because
A. as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses. B. increases in income cause a chain reaction of spending by many businesses and individuals. C. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels. D. businesses copy the spending decisions of their competitors. E. households tend to spend any increase in income.