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For each of the following years, determine the real interest rate. Find the difference between this rate and the desired real interest rate and explain how any difference affects borrowers and lenders. Write out percentage rates as whole numbers e.g. 5%. a. In year 1, the nominal interest rate is 9%, the inflation premium on loans is 5%, and actual rate of inflation is 6%. The real interest rate is %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) b. In year 2, the nominal interest rate is 10%, the inflation premium is 6%, and the actual rate of inflation is 4%. The real interest rate is %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v c. In year 3, the nominal interest rate is 8%, the inflation premium is 4%, and the actual rate of inflation is 4%. %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v The real interest rate is

For each of the following years, determine the real interest rate. Find the difference between this rate and the desired real interest rate and explain how any difference affects borrowers and lenders. Write out percentage rates as whole numbers e.g. 5%. a. In year 1, the nominal interest rate is 9%, the inflation premium on loans is 5%, and actual rate of inflation is 6%. The real interest rate is %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) b. In year 2, the nominal interest rate is 10%, the inflation premium is 6%, and the actual rate of inflation is 4%. The real interest rate is %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v c. In year 3, the nominal interest rate is 8%, the inflation premium is 4%, and the actual rate of inflation is 4%. %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v The real interest rate is

Exploring Economics
Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 13P
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For each of the following years, determine the real interest rate. Find the difference between this rate and the desired real interest rate and explain how any difference affects borrowers and lenders. Write out percentage rates as whole numbers e.g. 5%. a. In year 1, the nominal interest rate is 9%, the inflation premium on loans is 5%, and actual rate of inflation is 6%. The real interest rate is 1%, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) ♥ b. In year 2, the nominal interest rate is 10%, the inflation premium is 6%, and the actual rate of inflation is 4%. %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v The real interest rate is c. In year 3, the nominal interest rate is 8%, the inflation premium is 4%, and the actual rate of inflation is 4%. |%, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) - The real interest rate is < Prev 2 of 16 Next > 曲
Transcribed Image Text:For each of the following years, determine the real interest rate. Find the difference between this rate and the desired real interest rate and explain how any difference affects borrowers and lenders. Write out percentage rates as whole numbers e.g. 5%. a. In year 1, the nominal interest rate is 9%, the inflation premium on loans is 5%, and actual rate of inflation is 6%. The real interest rate is 1%, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) ♥ b. In year 2, the nominal interest rate is 10%, the inflation premium is 6%, and the actual rate of inflation is 4%. %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) v The real interest rate is c. In year 3, the nominal interest rate is 8%, the inflation premium is 4%, and the actual rate of inflation is 4%. |%, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select) - The real interest rate is < Prev 2 of 16 Next > 曲
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