When the inflation rate is expected to be zero, Steve plans to lend money if the interest rate is at least 4% a year and Cindy plans to borrow money if the interest is no more than 4% a year. Steve and Cindy make a loan agreement for one year at an interest rate of 4% a year when the inflation rate is zero. But if Steve and Cindy expect an inflation rate of 1% a year, they would be willing to make a loan agreement at ... % a year
What will be an ideal response?
5%
You might also like to view...
The Rule of ________ can be used to calculate the number of years that it takes for the level of a variable to ________
A) 20; double B) 70; triple C) 70; double D) 20; triple E) thumb; double
Explain the big tradeoff. What idea of fairness has been developed to deal with it?
What will be an ideal response?
An auction in which the price announced by the auctioneer DESCENDS is called a(n)
A) Dutch Auction. B) English Auction. C) Sealed Bid Auction. D) Descending Option Auction.
Why were there so few strikes from 1942-1945?
A. Unions were too weak to strike. B. Union members were afraid that their employers would move their factories to other countries. C. It was considered unpatriotic to strike while we were at full-scale war. D. Labor leaders were afraid that strikes would force financially weak employers out of business.