Homework Clinic
Social Science Clinic => Economics => Topic started by: ashley on Jun 29, 2018
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Suppose you lend 1,000 at an interest rate of 10 percent over the next year.
If the expected real interest rate at the beginning of the loan contract is 4 percent, then what rate of inflation over the upcoming year would be most beneficial to you as the lender? An inflation rate
A) equal to 4 percent. B) equal to 0 percent.
C) equal to 6 percent. D) greater than 6 percent.
Question 2
Refer to Figure 18-1. The appreciation of the dollar is represented as a movement from
A) D to C. B) C to B. C) B to A. D) C to A.
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Answer to Question 1
B
Answer to Question 2
A