Solved

You Borrow $10,000 from a Bank for One Year at a Nominal

Question 247

Multiple Choice

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.If inflation over the year is 2%,what is the real interest rate you are paying?


A) 2%
B) 2.5%
C) 3%
D) 5%

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q242: Table 9-6<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB1236/.jpg" alt="Table 9-6

Q243: The cost to firms of changing prices<br>A)is

Q244: The consumer price index implicitly assumes that

Q245: Table 9-21<br> <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB1236/.jpg" alt="Table 9-21

Q246: Currently,the base year for the CPI is

Q248: People who lost their jobs as hand-drawn

Q249: The natural rate of unemployment is the

Q250: The labor force participation rates of women

Q251: If the number of unemployed workers is

Q252: When deflation occurs<br>A)the real interest rate is