If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank?
A. 2.00%
B. 2.66%
C. 2.75%
D. 6.25%
B. 2.66%
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Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, ________ in country A will tend to ________
A) labor demand; decrease B) labor supply; decrease C) labor demand; increase D) labor supply; increase
According to the new classical approach to the aggregate supply curve, the aggregate supply curve slopes upward because
A) increases in the price level result in lower real balances. B) higher current output results in higher desired investment. C) higher prices result in higher levels of spending as consumers attempt to stay ahead of inflation. D) businesses have difficulty in distinguishing relative price increases from general price increases.
Firms cannot resemble
A) incomplete contracts. B) democracies. C) an organization without externalities. D) a benevolent dictator.
The financial crises of the 1990s pointed out that small developing countries have a vulnerability to globalization in terms of _____
a. environment b. labor standards c. international capital flows d. the judicial system e. child labor