If a lender wants a real return of 6 percent and she expects inflation to be 4 percent, which of the following is the correct nominal interest rate to charge?
a. 4 percent
b. 6 percent
c. 2 percent
d. 10 percent
e. -2 percent
D
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If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be
a. horizontal. b. relatively inelastic. c. relatively elastic. d. income proof.
A significant slowdown in the growth of productivity persisted in the U.S. economy between
a. 1960 and 1973. b. 1973 and 1995. c. 1973 and 2015. d. 1995 and 2015.
Pat can either drive to work, which takes half an hour and uses $1.50 worth of gas, or take the bus, which takes an hour and costs $1.00. How should Pat get to work?
A. Pat should take the bus because it costs $0.50 less than driving. B. Pat should take the bus if saving half an hour is worth $0.50 or more. C. Pat should drive because it saves half an hour relative to taking the bus. D. Pat should drive if saving half an hour is worth $0.50 or more.
Figure 17-10
Refer to . With trade and without a tariff, the price and domestic quantity demanded are
a.
P1 and Q1.
b.
P1 and Q4.
c.
P2 and Q2.
d.
P2 and Q3.