Author Question: If inflation had long been 4 and was therefore expected to continue, then it unexpectedly increased ... (Read 351 times)

littleanan

  • Hero Member
  • *****
  • Posts: 575
If inflation had long been 4 and was therefore expected to continue, then it unexpectedly increased to 7 inflation:
 a. the real interest rate on loans issued just before the change occurred would decrease by three percentage points.
  b. the real interest rate on loans issued just before the change occurred would increase by three percentage points.
  c. the real interest rate on loans issued just before the change occurred would not change.
 d. none of the above.

Question 2

The nominal interest rate equals:
 a. the real interest rate minus the inflation rate.
  b. the inflation rate minus the real interest rate.
  c. the real interest rate plus the inflation rate.
  d. none of the above.



johnpizzaz

  • Sr. Member
  • ****
  • Posts: 345
Answer to Question 1

a

Answer to Question 2

b



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

In 2010, opiate painkllers, such as morphine, OxyContin®, and Vicodin®, were tied to almost 60% of drug overdose deaths.

Did you know?

Vampire bats have a natural anticoagulant in their saliva that permits continuous bleeding after they painlessly open a wound with their incisors. This capillary blood does not cause any significant blood loss to their victims.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

For a complete list of videos, visit our video library