If Mr. Garrison is paid an interest rate of 4% on his savings, but the inflation rate is 7%, the real interest rate Mr. Garrison earns is
A. 28%.
B. 4%.
C. -3%.
D. -7%.
Answer: C
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A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as
A) active expectations. B) modern expectations. C) rational expectations. D) adaptive expectations.
How does a cap-and-trade system:
a. force polluters to internalize an externality? b. lower transactions costs? c. give incentive to polluters to find new ways to reduce pollution? d. make future pollution reductions easy to implement?
Nearly half of the publicly held U.S. federal debt are held by foreigners
a. True b. False Indicate whether the statement is true or false
The only solution available to a country experiencing extremely high rates of inflation is to:
A. revert to a gold standard. B. raise interest rates. C. peg your currency to another country's currency. D. reduce money growth.