If a lender charged a 9 percent nominal interest rate and the expected inflation rate is 4 percent, what is the difference between the real rate the lender received and the real rate the lender expected when actual inflation ended up being 2 percent?
a. 2 percent
b. 4 percent
c. -4 percent
d. 1 percent
e. 0 percent
A
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If the demand curve for desktop computers shifts rightward and at the same time the supply curve shifts leftward, then
A) the equilibrium price definitely rises. B) the equilibrium price definitely falls. C) the equilibrium price definitely remains the same. D) the equilibrium quantity definitely increases. E) More information is needed to determine the effect on the equilibrium price.
Gross domestic product in the economy is measured by the
A) total number of services produced in the economy. B) dollar value of all final goods and services produced in the economy. C) total number of goods and services produced in the economy. D) total number of goods produced in the economy.
When the Fed makes an open market ________, the target short-term nominal interest rate will increase, which will ________ GDP
A) purchase; increase B) purchase; decrease C) sale; increase D) sale; decrease
Mergers are closely scrutinized by the government because
A) they might allow the firms involved to dominate the market and act as a legalized cartel (monopoly). B) they always result in a more efficient market. C) they always result in lower joint profits of the firms involved. D) all mergers are undesirable.