« previous next »

Author Question: Say that initially the nominal interest rate is 6 and prices are stable, but the inflation rate the ... (Read 109 times)

jman1234

  • Hero Member
  • *****
  • Posts: 560
on: Jun 30, 2018
Say that initially the nominal interest rate is 6 and prices are stable, but the inflation rate the following year rises to 3. If the real rate of interest is to remain unchanged, the nominal interest rate in the second year must:
 a. rise by 9 percentage points.
  b. rise by 6 percentage points.
  c. rise by 3 percentage points.
  d. remain unchanged.

Question 2

What would happen to the real interest rate if originally the nominal interest rate was 14 and the inflation rate was 10, then the nominal interest rate fell to 7 as the inflation rate fell to 4? It would go from:
 a. 24 to 11.
  b. 11 to 24.
  c. 4 to 3.
 d. 3 to 4.


Jayson

  • Sr. Member
  • ****
  • Posts: 350
Reply #1 on: Jun 30, 2018
Answer to Question 1

c

Answer to Question 2

c


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

jman1234

  • Hero Member
  • *****
  • Posts: 560
Reply #2 on: Jun 30, 2018
Correct answers!


Jayson

  • Sr. Member
  • ****
  • Posts: 350
Reply #3 on: Jun 30, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

Immunoglobulin injections may give short-term protection against, or reduce severity of certain diseases. They help people who have an inherited problem making their own antibodies, or those who are having certain types of cancer treatments.

Did you know?

To prove that stomach ulcers were caused by bacteria and not by stress, a researcher consumed an entire laboratory beaker full of bacterial culture. After this, he did indeed develop stomach ulcers, and won the Nobel Prize for his discovery.

Did you know?

Patients who have undergone chemotherapy for the treatment of cancer often complain of a lack of mental focus; memory loss; and a general diminution in abilities such as multitasking, attention span, and general mental agility.

The rate of evolution in short­ and long­lived plants The rate of evolution in short­ and long­lived plants
Prices for Cotton and for Slaves, 1802–1860 Prices for Cotton and for Slaves, 1802–1860
Maximal Heart Rate Over Time Maximal Heart Rate Over Time
Influence of substrate concentration on the rate of an enzyme-catalyzed reaction. Influence of substrate concentration on the rate of an enzyme-catalyzed reaction.
Total Fertility Rate in Japan: Actual versus Forecast Total Fertility Rate in Japan: Actual versus Forecast
Outgroup role in relative rate test Outgroup role in relative rate test
Video: Introduction to Spirometry

For a complete list of videos, visit our video library