Author Question: Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know ... (Read 106 times)

MirandaLo · **on:** Jun 29, 2018

Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know that the inflation rate increases to 10 percent. What is the new nominal interest rate?

A) 8 percent
B) 3 percent
C) 13 percent
D) 11 percent

Question 2

In the computation of GDP, Social Security payments count as

A) transfer payments and are included in GDP.
B) transfer payments and are not included in GDP.
C) government expenditure on goods and services and are included in GDP.
D) government expenditure on goods and services and are not included in GDP.