Suppose that lenders want to receive a real rate of interest of 5 percent, and that they expect inflation to remain steady at 2 percent in the coming years. Based on this, lenders should charge a nominal interest rate of:
A. 2 percent.
B. 3 percent.
C. 5 percent.
D. 7 percent.
D. 7 percent.
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If the desired reserve ratio is 15 percent, then for every dollar that is deposited in the bank, the bank will
A) keep 15 cents as reserves. B) keep 85 cents as reserves. C) keep 85 cents as reserves and loan 85 cents. D) loan 15 cents. E) keep 15 cents as reserves and loan 15 cents.
In the long run in a monopolistically competitive industry,
a. economic profit will be positive b. the price will be driven to zero c. the firm will not operate where MR = MC d. economic profit will be zero e. the price will exceed average total cost
In the economy of Talikastan in 2015, consumption was $4000, exports were $800, GDP was $7500, imports were $200, and investment was $1000 . What were Talikastan's government purchases in 2015?
a. $1200 b. $1900 c. $2500 d. $4500
How can a buyer of car insurance help in reducing the effects of adverse selection?
What will be an ideal response?