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Social Science Clinic => Economics => Macroeconomics => Topic started by: audragclark on Jun 30, 2018

Title: If the nominal rate of interest is 10.5 percent, and the inflation rate is 4.3 percent, what is the ...
Post by: audragclark on Jun 30, 2018

If the nominal rate of interest is 10.5 percent, and the inflation rate is 4.3 percent, what is the real rate of interest?
 a. 3.0 percent
 b. 4.3 percent
 c. 6.2 percent
 d. 10.5 percent

Question 2

Given a fixed nominal interest rate on a loan, unanticipated deflation:
 a. decreases the burden of paying off the loan.
 b. increases the burden of paying off the loan.
 c. does not alter the burden of paying off the loan.
 d. has an indeterminate effect on the burden of paying off the loan.

Title: If the nominal rate of interest is 10.5 percent, and the inflation rate is 4.3 percent, what is the ...
Post by: LegendaryAnswers on Jun 30, 2018

Answer to Question 1

c

Answer to Question 2

b