Harare Zimbabwe's central bank today raised its key interest ra From 50 percent to 70 percent. The governor of the Reserve Bank of Zimbabwe said the higher rate was intended to slow Consumer spending, increase foreign buying of Zimbabwean dollars, and slow the rate of inflation, currently running at
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- How does indexing wage contracts to inflation help workers?The Kingdom of Wakanda is undergoing tremendous economic growth. Last year, its GDP grewby 11.45%. Wakanda's central bank - the Bank of Wakanda - is, however, worried about inflation,which has been hovering near double digits for the last two years. T'Challa, the country's ruler,says that he wants to sit down with Nakia, the Governor of the Bank of Wakanda, to discuss thecountry's potential economic problems. You are Nakia's advisor. Recommend a monetary policyfor Wakanda. How would the Bank of Wakanda carry out your recommendations?Only typed answer If the inflation rate is 4% per year and the market interest rate is known to be 13% per year, what is the implied real interest (inflation-free) rate in this inflationary economy? The implied real interest (inflation-free) rate is? (Round to two decimal places)
- Suppose Singsville National Bank lends money to Ari at 1.5% interest. If inflation is 1%, calculate the real interest rate that Ari pays for the loan.Did Singsville National Bank lose or earn money in this exchange?ASAP!! ANSWER PLEASE Indicate in each of the following cases, whether inflation will ‘help’ or ‘hurt’ the person/subject under consideration. Support your answers with relevant reasons. 2.2.1. Financial institutions like banks, lending loans at a fixed rate. 2.2.2. A person purchasing a home on 33 year-mortgage loan at a rate that changes every quarter. 2.2.3. An investor investing in a bank account offering a rate that adjusts every month. 2.2.4. A woman taking a fixed rate 5 year loan from a bank to start up her own business. 2.2.5. A bank offering return on savings at a fixed rate.There is a persistent fear that there will be a high level of deflation. Many economists arn that it may be worse for the economy than if there is high inflation. Suppose that Herb is in debt and has to pay a 5.50% nominal interest rate. He expected inflatin to be 3.00%. Instead, inflation is -2.00% deflation. What is the real interest rate that Herb expected to pay? What is the real interest rate that Herb is actually paying? Because the economy is experiencing deflation of -2.00% nstead of inflation of 3.00%. Herb's real interest rate, compared t what he expected to pay, has A. decreased, so Herb feels poorer. B. decreased, so Herb feels richer. C. increased, so Herb feels richer. D. increased, so Herb feels poorer.
- Harare Zimbabwe's central bank today raised its key intrest rate from 50 percent to 70 percent. The governor of the Reserve Bank of Zimbabwe said the higher rate was inteded to slow consumer spedning, increase foreign buying of Zimbabwe dollars, and slow the rate of inflation, currently running at approximately 200 percent a year. According to the World View after the key intrest rate was raised what was, a) the nominal intrest rate? b) the real intrest rate?"5.From 2015-2019, the Austrian accommodation and food services industries have grown in real terms by 4.1 %, the Austrian economy as a whole has grown by 8.7 %. Which of the following statements is true? a) Total production of the accommodation and food services industries in 2019 was larger than in 2015. b) Total production of the accommodation and food services industries has grown faster than the rest of the economy. c) The question can’t be answered because inflation is not corrected for. d) From the given numbers it follows that the sum of tourism receipts has grown during the respective period. e) During that period the contribution of the accommodation and food services industries to the Austrian economy has relatively decreased.In early 2017, policymakers at the Federal Reserve forecast that real GDP during 2017 would increase faster than potential GDP and that the inflation rate for the year would be about 1.9 percent. Source: Federal Open Market Committee, "Advance Release of Table 1 of the Summary of Economic Projections to be Released with the FOMC Minutes," March15, 2017. Fill in the missing values in the table with estimates that are consistent with these forecasts. Assume that the growth rate for real GDP between 2016 and 2017 is 0.32 percentage points higher than the percentage change in potential output between those years (rounded to two decimal places). 2016 2017 Real GDP $16.7 trillion $nothing trillion Potential GDP $16.9 trillion $17.1 trillion GDP Deflator 111.5 nothing (Enter your responses rounded to one decimal place.)
- Suppose that at the start of 1999, Ari invests their money in a savings account earning 3.6% interest. If inflation is 1% during 1999, calculate the real interest rate on Ari’s savings account by the end of 1999. Has the inflation-adjusted value of Ari’s savings increased or decreased?Is an increase in real interest rate always proportional to an increase in the growth rate of money supply (long run)?There is a persistent fear that there will be a high level of deflation. Many economists warn that it may be worse for the economy than if there is high inflation. Suppose that Herb is in debt and has to pay a 5.255.25% nominal interest rate. He expected inflation to be 1.501.50%. Instead, inflation is −2.00−2.00% (deflation). What is the real interest rate that Herb is expected to pay and that Herb is actually paying?