The real rate of interest is 4% and the anticipated rate of inflation is 1%. What is the nominal rate of interest?
A) 1%
B) 3%
C) 4%
D) 5%
D
You might also like to view...
All economic models must involve simplifications because
a. economists would be unable to command high salaries if their models were so simple that anyone could understand them b. human behavior is very erratic and unpredictable c. reality is too complex to understand in its entirety, so we must reduce it to a level that we can understand d. they always try to duplicate all possible information and cover all possible variables that might influence decision making e. we must rely on value judgments and ignore reality
Energy drinks and granola bars are normal goods. When the price of energy drinks decreases, the income effect causes
a. the consumer to feel richer, so the consumer buys more granola bars. b. the consumer to feel richer, so the consumer buys fewer granola bars. c. granola bars to be relatively more expensive, so the consumer buys more granola bars. d. granola bars to be relatively less expensive, so the consumer buys fewer granola bars.
Each of the following would be an example of technological change, EXCEPT
A. increases in output due to increases in capital. B. improvements in the qualities of resources. C. improved knowledge about how to combine resources. D. the introduction of totally new production processes.
Grapevine Bank receives a deposit of $200,000. Its required reserve ratio is 12 percent. How much of this deposit is available to be loaned to borrowers?
a. $12,000 b. $176,000 c. $200,000 d. $24,000