Suppose you are a mortgage lender. Your goal is to set your rates in such a way as to maximize your profits. How would you use what you know about inflation rates and nominal and real interest rates to determine what rate to charge?
What will be an ideal response?
Answers to this question will vary but should exhibit an understanding of how
estimating the inflation rate factors into distinguishing the real interest rate from the
nominal interest rate. For example, if your goal was to earn a 3 percent return on your
investment (the real interest rate) and inflation was anticipated to be 2 percent, you
would set your interest rate at 5 percent (the nominal interest rate).
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In 2007, France's GDP totaled $1.9 trillion and in 2006 GDP was $1.8 trillion. The total amount spent on new capital in 2007 was $357 billion and in 2006 was $335 billion
To calculate the amount of net investment in France for these years, you need to know ________. A) saving B) depreciation C) the amount of financial capital available. D) the aggregate production function.
Which one of the following people would be counted as unemployed in Canada?
A) Ruth is a 14-year-old student and has been looking for an after-school job every day for the past month. B) Ron has quit looking because he believes that there is no work available for him. C) Simone is currently working but expects to be laid off by the end of the month, before next month's survey can be completed. D) Sarah has been looking for a job but is taking a month-long break from the job-seeking effort due to her lack of skills. E) Rebekah is a recent graduate looking for work.
Which of the following is a common barrier to entry in a monopoly market?
A. Antitrust laws. B. Economies of scale. C. Economic profit of the monopolist. D. A rising long-run average total cost curve.
The total utility of water is
A. lower than the total utility of diamonds, but the marginal utility is higher. B. the same as the total utility of diamonds, but the marginal utilities are the same. C. lower than the total and marginal utility of diamonds. D. higher than the total utility of diamonds, but the marginal utility of diamonds is higher.