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Author Question: If the inflation rate is positive, then the real interest rate is greater than the nominal interest ... (Read 176 times)

ENagel

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  • Posts: 540
on: Jun 29, 2018
If the inflation rate is positive, then the real interest rate is greater than the nominal interest rate. Is the previous statement correct or incorrect? Explain your answer.
 
  What will be an ideal response?

Question 2

Which of the following formulas is correct?
 
  A) Net investment = gross investment + capital
  B) Net investment = gross investment - saving
  C) Net investment = gross investment - wealth
  D) Net investment = gross investment - depreciation
  E) Net investment = gross investment + depreciation


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bigsis44

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect. The nominal interest rate equals the real interest rate plus the inflation rate. Therefore, if the inflation rate is positive, the nominal interest rate is greater than the real interest rate.

Answer to Question 2

D


ENagel

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  • Posts: 540
Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

carlsona147

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  • Posts: 341
Reply 3 on: Yesterday
Great answer, keep it coming :)

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