Suppose the nominal annual interest rate on a two-year loan is 8 percent and lenders expect inflation to be 5 percent in each of the two years. The annual real rate of interest is:
A. 6 percent.
B. 8 percent.
C. 2 percent.
D. 3 percent.
D. 3 percent.
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A seller with market power has greater command over product price compared to a perfect competitor and is thus less enthusiastic in devising new ways to create economic value
Indicate whether the statement is true or false
Mark's Baseballs produces baseballs. Mark's Baseballs has total fixed costs of $500. Mark's average variable cost is $20, and his average total cost is $25. Mark is currently producing:
A. 5 baseballs. B. 25 baseballs. C. 100 baseballs. D. a number of baseballs that cannot be determined from the information provided.
In the figure above, the substitution effect outweighs the income effect in all segments EXCEPT
A) 0a. B) 0c. C) bc. D) cd.
Currency consists of
A) only coins minted by the U.S. Treasury. B) only Federal Reserve notes. C) coins minted by the U.S. Treasury and Federal Reserve notes. D) coins, Federal Reserve Notes and traveler's checks.