Author Question: Suppose a credit union strives for a 3 real return on its loans to members, and expects a 2 ... (Read 71 times)

Alainaaa8 · **on:** Jun 29, 2018

Suppose a credit union strives for a 3 real return on its loans to members, and expects a 2 inflation rate. What nominal rate of interest should it charge its members?

A) 0
B) 1
C) 3
D) 6

Question 2

Suppose a bank wants a 5 real return on its loans, and contemplates a 1 annual inflation rate. The bank should therefore charge a nominal interest rate of

A) 1.
B) 4.
C) 5.
D) 6.