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Author Question: If the nominal interest rate equals 10 percent and the inflation rate equals 6 percent, what does ... (Read 92 times)

WWatsford

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on: Jun 29, 2018
If the nominal interest rate equals 10 percent and the inflation rate equals 6 percent, what does the real interest rate equal?
 
  What will be an ideal response?

Question 2

Refer to the scenario above. If the curator values the painting at 45,000, which of the following problems is likely to arise?
 
  A) Adverse selection
  B) Free-rider problem
  C) The paradox of thrift
  D) The tragedy of the commons


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adf223

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

The real interest rate equals the nominal interest rate minus the inflation rate, or in this case, 10 percent minus 6 percent, which equals 4 percent.

Answer to Question 2

A


WWatsford

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Reply 2 on: Jun 29, 2018
Gracias!

amit

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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