Define the Nominal Interest Rates?

Q: why is nominal interest always positive but not negative or zero

A: Nominal interest refers to the rate of lending before taking inflation into account.

Q: What is the inflation-free interest rate?

A: Interest rate is that percentage of investment that the lender receives for letting the borrower to…

Q: What is the real interest rate?

A: Real interest rate is an interest rate which removes the effect of inflation and reflects the real…

Q: If you are a banker, should you consider the nominal or real interest rate when deciding which rate…

A: Nominal Interest rates :  It refers to that cost of capital which a borrower has to pay and a lender…

Q: Calculate nominal interest rate in the economy when real interest rate is 7% and inflation rate is…

A: # in an economy given the nominal interest rate, and inflation rate the real interest is given to be…

Q: Find the value of inflation if real interest rate is 0 and nominal interest rate is 4.6%

A: We are given that:- Real interest rate = 0% Nominal interest rate = 4.6% Note- Real interest rate is…

Q: In an economy the real interest rate and inflation is 3% and 1.8% respectively  Find nominal…

A: The information being given is:- Real interest rate = 3% Inflation rate = 1.8% We have to calculate…

Q: Discuss the relationship between nominal and effective interest rates?

A: Macroeconomics is a part of economics that deals with production, decision and allocation concerning…

Q: If inflation is 2% and Nominal interest rate is 2.6%  Find real interest rate

A: Real interest rate = nominal interest rate - inflation rate.

Q: What is the Nominal interest?

A: The percentage of the principal amount that charged by a lender to a borrower is referred to as…

Q: What are the impacts of inflation for borrowers and savers

A: The impact of inflation on borrowers: It permits the borrowers to pay back the money, whose value…

Q: What is the nominal interest rate?

A: The nominal interest rate is an interest rate which does not take inflation into the account and is…

Q: ssume that Gabriel earned a nominal wage rate of $15 per hour in 2019, the base year for the CPI.…

A: Real wage rate = Nominal wage rate x (Current year CPI / Base year CPI) In base year, CPI is always…

Q: If inflation is 1% and nominal interest rate is 9%  Calculate real interest rate

A: It's given in the question that:- Inflation = 1%  Nominal interest rate = 9% Thus we need to…

Q: what is ? 1-)Nominal Interest Rate 2-)Real Interest Rate 3-)Labor Force

A: The Nominal Interest rate (i) is the interest rate when inflation is not taken into account. This…

Q: If in the banking sector the nominal interest rate is 3% and inflation rate is 1.7%  Calculate what…

A: The information being given is:- Nominal interest rate in banking rate = 3% Inflation rate = 1.7% We…

Q: If the nominal interest rate is 5 percent and the inflation rate is 2 percent, then what is the real…

A: The interest rate is the amount paid for the money for not using for the purpose of consumption in…

Q: nominal rate of interest and what is the real rate of interest

A: The inflation depicts the rise in level of prices. The inflation is of different types: Creeping…

Q: In an economy, the inflation rate and real interest rate are 1.8% and 3%  Find nominal interest…

A: Answer in step 2

Q: Explain the concept: nominal interest rate

A: Interest rate is the a prescribed percentage that is supposed to be paid by the borrower to the…

Q: What is the value of inflation when real interest rate is 6% and the nominal interest rate is also…

A: # The difference between Nominal interest rate and real interest rate gives us the value of…

Q: Describe the difference between nominal interest rate and real interest rate?

A: In economics, interest rate is classified as nominal interest rate and real interest due to the…

Q: Refer to the hypothetical data in the table to answer the three questions. What was the real…

A: Nominal interest rates refer to the cost of capital/borrowing which are valued at current price…

Q: If nominal interest rate is 6% and inflation is 8%, what is the real interest rate?

A: Given data: Nominal Interest rate = 6% Inflation = 8%

Q: Using Kendall's notation, wh- Draw the rate diagram or the

A: Answer 1) Average rate of arrival = no. of shoppers incoming per hour =lembda= five customers per…

Q: What is the real interest rate if the nominal interest rate is 8% and the expectedinflation rate is…

A: Nominal interest rate minus inflation rate is the real interest rate. Nominal interest rate is 8%…

Q: Explain how a nominal interest rate of 100% can actually be a low rate.

A: Interest rates are the cost of borrowing and saving money and are stated as a percentage of the…

Q: Illustrate the relationship between nominal and effective interest rates?

A: The interest rate can take two forms which are nominal interest rate and effective interest rate.…

Q: If inflation is currently 2.55% and a bank is lending money at 7.75% interest, what is the real…

A: Inflation (I) = 2.55% Bank interest rate (R) = 7.75%

Q: Why does the GDP deflator give a different rate of inflation than the CPI ?

A: In an economy, inflation is measured using different economic tools that are CPI, WPI, and GDP…

Q: The CPI fell from 110 at the start of the year to 125 at the end of the year. If the real interest…

A: The consumer price index (CPI) changes from 110 to 125.  The change in CPI measures the inflation…

Q: Frank agrees to lend his friend Sammy $1000 for one year so that Sammy can buy a new computer.…

A: A consumer price index is a cost record, the cost of a weighted typical market container of buyer…

Q: What is a monotonically decreasing function of interest rate?

A: Monotonic functions are always Increasing or decreasing in nature, It means the value of function…

Q: Suppose that at the start of 1999, Ari invests their money in a savings account earning 3.6%…

A: Real interest rate = Nominal interest rate-rate of inflation

Q: Why is it important that the rate at which we earn interest should be higher than the inflation rate

A: The inflation rate is the rate at which the price level of goods and services rises in the economy.…

Q: If the nominal interest rate is 5 percent and the inflation rate is 2 percent, what is the real…

A: Nominal interest rate is the rate of interest before the adjustments of inflation. given: Nominal…

Q: Describe what is Inflation-free interest rate?

A: Interest rate refers to percentage of investment that the lender receives for letting the borrower…

Q: Describe the concepts of nominal and effective interest?

A: The fraction of the principal amount that charged by a lender to a borrower is considered as…

Q: In the economy, Nominal Interest rate is 2% and real interest rate is 1.5% Calculate inflation

A: We are given that:- Nominal interest rate = 2% Real interest rate = 1.5% We need to calculate…

Q: Is it possible for the nominal interest rate to be negative? Why or whynot?

A: Nominal Interest Rates are those interest rates which prevailed in an economy in a particular period…

Q: Consider an economy where: The real rate of interest The nominal rate of interest 4.11% 7.09%…

A: Real Interest Rate = 1 + Nominal Interest Rate1 + Inflation Rate -1 Real interest rate = Nominal…

Q: Frank agrees to lend his friend Sammy $1000 for one year so that Sammy can buy a new computer.…

A: