Suppose you place $10,000 in a retirement fund that earns a nominal interest rate of 8 percent. If you expect inflation to be 5 percent or lower, then you are expecting to earn a real interest rate of at least:
A. 1.6 percent.
B. 3 percent.
C. 4 percent.
D. 5 percent.
Answer: B
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If immigration increases the productivity of domestic workers, then it:
A. Decreases the return on capital B. Means that immigrant workers and domestic workers are substitutes C. Means that immigrant workers are entering low-wage occupations D. Increases the return on capital
Positive economics statements are testable
Indicate whether the statement is true or false
Cost minimization requires that a firm equate the ratio of marginal products of inputs to the ratio of input prices
a. True b. False Indicate whether the statement is true or false
When the Federal Reserve buys government bonds from the public, this is an example of a(n):
A. open-market purchase. B. discount loan. C. bank panic. D. open-market sale.