You borrow at a nominal interest rate of 10 percent. If the inflation rate is 4 percent, then the real interest rate is
A) 6 percent.
B) 14 percent.
C) the $10 in interest you have to pay.
D) 16 percent.
E) 2.5 percent.
A
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To calculate tax revenue:
A. divide total revenues by the tax per unit. B. multiply total revenues by the tax per unit. C. multiply the tax per unit by the number of units of the item being taxed. D. multiply the tax per unit by the price of the unit being taxed.
Ordinary least squares estimation is subject to heterogeneity bias if _____.
A. the regression model exhibits heteroskedasticty B. the unobserved effect is correlated with the observed explanatory variables C. the regression model includes a lagged dependent variable D. the explanatory variables do not change over time
In classifying expenditures, which of the following is an illustration of an “object”?
A. Arson investigation B. Fire Department C. Materials and supplies D. Public Safety
The investment function would shift outward to the right if
A. there was a decrease in business taxes. B. there was more uncertainty about future economic conditions. C. real disposable income decreased. D. interest rates decreased.