If a lender desires to earn a real return of 3 percent on a loan and the anticipated rate of inflation is 2 percent, the lender should charge a
A. Real interest rate of 5 percent.
B. Nominal interest rate of 3 percent.
C. Real interest rate of 6 percent.
D. Nominal interest rate of 5 percent.
Answer: D
You might also like to view...
The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. The sales tax on anti-freeze decreases the quantity of anti-freeze that automobile owners purchase by
A) 0 gallons. B) 1000 gallons. C) 2000 gallons. D) 3000 gallons.
Consider the above figure. If the aggregate demand fell from AD1 to AD2, our nation would be experiencing
A) an inflationary gap. B) a recessionary gap. C) overemployment. D) rising prices.
Screening is
a. actions by the informed party to reveal her true risks b. actions by the informed party to conceal her true risks c. actions by the uninformed party to uncover the true risks d. actions by the uninformed party to conceal the true risks
If the Herfindahl index is the same in two industries, we can conclude that
a. the number of firms in each industry is the same b. there must not be the same number of firms in the two industries c. the sum of the squared market shares of all firms is the same in the two industries d. there must be an identical distribution of market share among firms in the two industries e. there must be a different distribution of market share among firms in the two industries