The nominal rate of interest is 2% and the anticipated rate of inflation is 2%. What is the real rate of interest?
A) 4%
B) 2%
C) -4%
D) 0%
Answer: D
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When real rates of interest are positive, it is better to be a:
A. saver than a borrower, because the value of savings and debts are increasing. B. borrower than a saver, because the value of savings and debts are increasing. C. saver than a borrower, because the value of savings and debts are decreasing. D. borrower than a saver, because the value of savings and debts are decreasing.
The fiscal year
A. Is the 12-month period used for federal government accounting purposes. B. Is the period during which the government must balance the budget. C. Begins in January for the federal government. D. None of the choices are correct.
Which of the following would be included in the calculation of GDP?
a. an antique diamond necklace b. a new toaster c. a second-hand dress d. a mint condition 1940 baseball card
You will agree to lend your sister's grandma's daughter $2,000 for a year, if at the end of the year she pays you $2,200. The interest rate you are charging her is
A. 1.1%. B. 9.09%. C. 10%. D. 20%.