If the long-term real interest rate is 5.1%, the term structure effect is 2.0%, the default-risk premium is 1.7%, and the expected rate of inflation is 3.3%, the short-term nominal interest rate will be
A) -1.9%.
B) 4.7%.
C) 5.5%.
D) 12.1%.
B
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Which of the following is true of the inflation experienced by the Latin American countries during the 1980s and early 1990s? a. In 1990, annual inflation in Brazil and Argentina was below 10 percent
b. In the late 1980s, Brazil and Argentina experienced a steady inflation of 4 percent. c. In the late 1980s, Brazil and Argentina experienced deflation. d. In 1990, annual inflation in Brazil and Argentina climbed to over 2000 percent.
In a constant-cost industry, an increase in output that increases the demand for resources used by the industry
a. is likely to result in higher prices for at least some resources. b. causes the firm's cost curves to shift downward. c. causes the demand curve for the industry to rise. d. is not likely to result in higher prices for resources.
If the market supply curve does not capture all of the costs to society of producing an additional unit of good, then:
A. the allocation of resources will be efficient. B. the market equilibrium will be socially optimal. C. the market equilibrium will not be efficient. D. the market will not be in equilibrium.
The airline industry is an example of a(n) ________ industry.
A. oligopolistic B. perfectly competitive C. monopolistic D. monopolistically competitive