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

Author Question: You have a 500 saving bond. The nominal interest rate is 10 percent, and the inflation rate is 4 ... (Read 40 times)

panfilo

  • Hero Member
  • *****
  • Posts: 572
on: Jun 30, 2018
You have a 500 saving bond. The nominal interest rate is 10 percent, and the inflation rate is 4 percent. After a year, in real terms you have earned
 
  A) 70. B) 40. C) 50. D) 510. E) 30.

Question 2

Consumption has fallen substantially in Techland due to pessimism among households. What will be the outcome if a contractionary monetary policy is adopted during this period?
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Cnarkel

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jun 30, 2018
Answer to Question 1

E

Answer to Question 2

If a contractionary monetary policy is adopted during this period, consumption and investment will fall further. This is because a fall in money supply will lead to a fall in the aggregate price level. If output prices fall, firms will reduce production and lay off workers. As a result, consumption will fall. Investment will also fall if the government adopts a contractionary monetary policy because a decrease in money supply will lead to an increase in interest rates.


panfilo

  • Member
  • Posts: 572
Reply 2 on: Jun 30, 2018
:D TYSM

kswal303

  • Member
  • Posts: 316
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

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?

After 5 years of being diagnosed with rheumatoid arthritis, one every three patients will no longer be able to work.

Independent assortment produces 50 percent recombinants Independent assortment produces 50 percent recombinants
For linked genes, recombinant frequencies are less than 50 percent For linked genes, recombinant frequencies are less than 50 percent
3-13 Formation of a peptide bond by condensation 3-13 Formation of a peptide bond by condensation
How to calculate simple interest (Part 3) How to calculate simple interest (Part 3)
Saving and Investment Rates of Industrialized Countries, 1960–1974 Saving and Investment Rates of Industrialized Countries, 1960–1974
At what pH is the amino acid glycine with a Ka of 2.51 × 10-10 sixty-six (66%) percent ... At what pH is the amino acid glycine with a Ka of 2.51 × 10-10 sixty-six (66%) percent ...
Video: Properties of water -structure of water and polarity (Ionized and polar compounds)

For a complete list of videos, visit our video library