This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain why high nominal interest rates in an economy does not necessarily mean real interest rates ... (Read 248 times)

Starlight

  • Hero Member
  • *****
  • Posts: 567
on: Jun 30, 2018
Explain why high nominal interest rates in an economy does not necessarily mean real interest rates in the same economy are also high.
 
  What will be an ideal response?

Question 2

The GDP deflator measures
 
  A) the quality of the goods and services in GDP.
  B) the quantity level.
  C) nominal GDP.
  D) real GDP.
  E) the price level.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Joc

  • Sr. Member
  • ****
  • Posts: 317
Reply #1 on: Jun 30, 2018
Answer to Question 1

Real interest rates have been adjusted for inflation and are calculated as nominal interest rates minus the inflation rate. The higher the inflation rate, the lower the real rate of interest, so high nominal interest rates do not always mean high real interest rates. For example, if the nominal interest rate is 12 percent, and the inflation rate is 9 percent, the real interest rate is only 3 percent.

Answer to Question 2

E


Starlight

  • Member
  • Posts: 567
Reply 2 on: Jun 30, 2018
:D TYSM

skipfourms123

  • Member
  • Posts: 343
Reply 3 on: Yesterday
Wow, this really help

« previous next »
 

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

The liver is the only organ that has the ability to regenerate itself after certain types of damage. As much as 25% of the liver can be removed, and it will still regenerate back to its original shape and size. However, the liver cannot regenerate after severe damage caused by alcohol.

Did you know?

There used to be a metric calendar, as well as metric clocks. The metric calendar, or "French Republican Calendar" divided the year into 12 months, but each month was divided into three 10-day weeks. Each day had 10 decimal hours. Each hour had 100 decimal minutes. Due to lack of popularity, the metric clocks and calendars were ended in 1795, three years after they had been first marketed.

These adolescents have just graduated and look forward to moving on from high school and adolesence These adolescents have just graduated and look forward to moving on from high school and adolesence
Deconvolution fluorescence microscopy yields high-resolution optical sections th Deconvolution fluorescence microscopy yields high-resolution optical sections th
Effect of dietary fats on high- and low-density cholesterol levels Effect of dietary fats on high- and low-density cholesterol levels
Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ... Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ...
A concrete wall of a cold storage room measures 3.0 m high, 5.0 m wide, and 20 cm thick. The ... A concrete wall of a cold storage room measures 3.0 m high, 5.0 m wide, and 20 cm thick. The ...
A $50 000 bond bearing interest at 6.5% bond payable semi-annually matures in 10 years. If it ... A $50 000 bond bearing interest at 6.5% bond payable semi-annually matures in 10 years. If it ...
Video: Second Messengers in the Inositol-lipid Signaling Pathway

For a complete list of videos, visit our video library