If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your
A. real rate of interest is 13 percent.
B. expected rate of inflation is 5 percent.
C. expected rate of inflation is 13 percent.
D. real rate of interest is 36 percent.
Answer: B
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Listed in the above table are the market shares for the firms in two different industries. Each industry has only eleven firms. Find the four-firm concentration ratio and the Herfindahl-Hirschman Index for each industry
What will be an ideal response?
The supply of loanable funds has a ________ slope because the greater the interest rate, the ________ the reward to saving, and the ________ the quantity of loanable funds supplied
A) positive; lesser; lesser B) negative; lesser; greater C) positive; greater; lesser D) positive; greater; greater
Which of the following is NOT likely to occur when a bank fails?
A) Everyone that deposits money in the bank loses all or a portion of their money, unless the country has a functioning deposit insurance system. B) The loss of savings (or the feared loss of savings) causes households to cut back on consumption, which spreads the recessionary effect wider through the country. C) Unaffected banks may stop making loans as they take a cautious approach, slowing or stopping new investment. D) Layoffs occur and the economy falls deeper into a downward spiraling inflation. E) Other banks make too many loans to make up for the loans not made by the failed bank, kicking off a cycle of stimulation and inflation.
Investment is a flow of resources into the production of new capital.
Answer the following statement true (T) or false (F)