If the real interest rate is 4 percent and the inflation rate is 9 percent, then the nominal interest rate equals:
A. 13 percent.
B. 4 percent.
C. 9 percent.
D. 36 percent.
Answer: A
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Suppose Mary is willing to pay up to $15,000 for a used Ford pick-up truck. If she buys one for $12,000, her ________ would be ________.
A. economic surplus; $12,000 B. cost; $15,000 C. benefit; $12,000 D. economic surplus; $3,000
One of the components of the consumption function is induced consumption and this consumption is induced by changes in the
a. price level b. level of income c. interest rate d. level of investment e. level of saving
The legally bound obligation to pay debts:
a. note of stockhold b. dividend c. note of Stockholm d. liability e. stock and bondhold
In an economic downturn, sticky wages and prices reduce the economy's speed of adjustment because
A. hyperinflation will likely occur. B. they cause deflation. C. union workers would likely quit and look for work elsewhere. D. businesses are unable to adjust quickly to changes in aggregate demand.