Suppose you have $400 to invest at a nominal interest rate of 7 percent, and the investment's term to maturity is 1 year. If the inflation rate is 2 percent, then the real return on your investment is approximately
A) $8. B) $20. C) $28. D) $36.
B
You might also like to view...
List the three possible ways the government can make adjustments, and the three possible ways the private sector can make adjustments, to an increase in the government's budget deficit
What will be an ideal response?
Which of the following statements is true?
A) Nonactivists argue that monetary and fiscal policies should be deliberately used to smooth out the business cycle. B) Fine-tuning consists of the usually frequent use of monetary policy to counteract even small undesirable movements in economy activity. C) Keynesians would be more likely to advocate contractionary monetary policy to correct an inflationary gap than expansionary monetary policy to correct a recessionary gap. D) b and c E) a, b and c
Which of the following will always cause an increase in net exports?
A) a reduction in domestic output B) an increase in the real exchange rate C) an increase in government spending D) an increase in investment E) all of the above
Refer to the information provided in Table 3.1 below to answer the question(s) that follow. Table 3.1Price per PizzaQuantity Demanded (Pizzas per Month)Quantity Supplied (Pizzas per Month)$31,200 600 61,000 700 9 800 80012 600 90015 4001,000Refer to Table 3.1. If the price per pizza is $12, there is an excess
A. demand of 400 pizzas. B. supply of 300 pizzas. C. demand of 600 pizzas. D. supply of 900 pizzas.