Assume you borrow funds to buy a new car at 5 percent interest and you think that the economy-wide rate of inflation over the life of the loan will be 4 percent. If you are correct in your assumption, your real rate of interest on the car loan will be
A. 5 percent.
B. 4 percent.
C. 1 percent.
D. 2 percent.
Answer: C
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If the market price for a competitive firm's output doubles then
A) the profit maximizing output will double B) the marginal revenue doubles C) at the new profit maximizing output, price has increased more than marginal cost D) at the new profit maximizing output, price has risen more than marginal revenue E) competitive firms will earn an economic profit in the long-run.
A decrease in the price of peanut butter will most likely cause an increase in the demand for ______.
a. orange juice b. margarine c. jelly d. cheese spread
In 1992 hurricanes damaged parts of Florida, Louisiana, and Hawaii, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused
A) scarcity, because the damages made food and shelter scarce. B) scarcity, because some goods were difficult to get. C) shortages, because supplies were cut off and goods were destroyed. D) absolute advantages, because some areas of the country were damaged when others were not.
Figure 5.4In Figure 5.4, supply elasticity is infinite in graph:
A. A. B. B. C. C. D. D.