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Author Question: Dean borrows $400 from Tim. Tim wants to make a 10% real return on his money, so they both agree on ... (Read 104 times)

fox

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on: Apr 19, 2019

Question 1

Eliza wants to borrow $100 from Sandy. Sandy wants to make 4% real return on his money, so they both agree on a 4% interest rate paid next year. Eliza and Sandy did not anticipate any inflation, yet the actual inflation turned out to be -5% next year. In this case


◦ Eliza will pay an 9% real interest rate.
◦ Sandy is better off.
◦ Eliza will pay a 4% nominal interest rate.
◦ All of these.

Question 2

Dean borrows $400 from Tim. Tim wants to make a 10% real return on his money, so they both agree on a 10% interest rate paid next year. Dean and Tim did not anticipate any inflation, yet the actual inflation turned out to be 4% next year. In this case


◦ Tim is better off.
◦ Dean will pay $56 a year from now on.
◦ Dean is better off.
◦ Tim will receive more than 10% of real rate of return a year from now.
Principles of Economics ¦ Case, Fair, Oster ¦ 12th Edition
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Marked as best answer by fox on Apr 19, 2019

cloudre37

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Reply #1 on: Apr 19, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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fox

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Reply 2 on: Apr 19, 2019
Gracias!

coreycathey

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

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