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

Author Question: What is meant by the term rate of interest? If the nominal rate of interest in an economy is 6, and ... (Read 126 times)

Alygatorr01285

  • Hero Member
  • *****
  • Posts: 564
on: Jun 30, 2018
What is meant by the term rate of interest? If the nominal rate of interest in an economy is 6, and the rate of inflation in the economy is 4, what is the real rate of interest in the economy?
 
  What will be an ideal response?

Question 2

Which of the following is likely to happen if the quantity of bank reserves held at the Fed increases?
 
  A) The stock of money in the economy increases. B) The number of loans issued by banks decrease.
  C) Bank deposits decrease. D) The real interest rate increases.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

essyface1

  • Sr. Member
  • ****
  • Posts: 347
Reply #1 on: Jun 30, 2018
Answer to Question 1

The rate of interest is the additional payment a borrower has to make on a one-dollar loan typically at the end of a year.
The real rate of interest = nominal rate of interest - inflation rate  the real rate of interest = 2.

Answer to Question 2

A


Alygatorr01285

  • Hero Member
  • *****
  • Posts: 564
Reply #2 on: Jun 30, 2018
Thank you :)


essyface1

  • Sr. Member
  • ****
  • Posts: 347
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Automated pill dispensing systems have alarms to alert patients when the correct dosing time has arrived. Most systems work with many varieties of medications, so patients who are taking a variety of drugs can still be in control of their dose regimen.

Did you know?

Atropine was named after the Greek goddess Atropos, the oldest and ugliest of the three sisters known as the Fates, who controlled the destiny of men.

Did you know?

According to the American College of Allergy, Asthma & Immunology, more than 50 million Americans have some kind of food allergy. Food allergies affect between 4 and 6% of children, and 4% of adults, according to the CDC. The most common food allergies include shellfish, peanuts, walnuts, fish, eggs, milk, and soy.

Did you know?

Normal urine is sterile. It contains fluids, salts, and waste products. It is free of bacteria, viruses, and fungi.

Did you know?

A headache when you wake up in the morning is indicative of sinusitis. Other symptoms of sinusitis can include fever, weakness, tiredness, a cough that may be more severe at night, and a runny nose or nasal congestion.

Changes in metabolic rate of selected structures in a mammal's body during different activities Changes in metabolic rate of selected structures in a mammal's body during different activities
Primary production is positively correlated with the evapotranspiration rate. Primary production is positively correlated with the evapotranspiration rate.
Testing the effects of long-term fertilizing on inter-actions between mycorrhizal fungi and plants o Testing the effects of long-term fertilizing on inter-actions between mycorrhizal fungi and plants o
Static Stability & Environmental Lapse Rate Static Stability & Environmental Lapse Rate
Enzymatic rate enhancements Enzymatic rate enhancements
Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ... Calculate the amount of interest that will be charged on $9000.00 borrowed for four months at ...
Video: Brain Anatomy Animation (Part 1 of 2)

For a complete list of videos, visit our video library