How is NAIRU supposed to be a "better" definition than "Natural Rate"? Are either of these good definitions? Why or why not?

Q: gap of £200 billion. With the aid of Figure 4, work out what base rate is required to create this…

A: In IS curve with fall in real interest rate by the central bank the investment increases thus…

Q: difference between real and nominal intrest rates. Can intrest rates ever be negative

A: Interest rate is the rate at which the money is borrowed from the lenders. It is calculated by…

Q: If Dave loans funds at 2 percent while the inflation rate is 4 percent, his real rate of interest is…

A: Nominal Interest Rate(i) is the percentage(%) increase in money that borrower pays without taking…

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: Suppose that an economy starts with a net foreign asset to GDP ratio (NFA/Y) equal to -30%. After…

A: The net foreign asset is the difference between the purchase of the foreign assets abroad and the…

Q: What is the roles of BSP when the society suffers from high inflation rate

A: A very high rate of inflation is always detrimental for an economy as it may lead to evil…

Q: What is the equilibrium quantity of credit card balances when the nominal interest rate is zero?…

A: Nominal interest rate refers to the interest rate before taking inflation into account. Nominal can…

Q: Distinguish between nominal and real interest rates. Which is more relevant in making investment and…

A: Real interest rate was taken into consideration to remove the effects of inflation, so that the real…

Q: Can the nominal interest rate be negative? Discuss.

A: By fisher's equation it is said that, Nominal interest rate = Real interest rate + Expected…

Q: Explain the meanings of nominal interest rate and realinterest rate. How are they related?

A: The interest rate is the amount of payment that is charged by a lender on a borrower for the use of…

Q: differentiate the 3 types of inflation

A: Inflation is the increase in price of goods and services over time. Inflation leads to higher prices…

Q: In this example, we return to the question raised in the chapter opener. According to government…

A: Given: Median household income in 1953 = $3,700 Median household income in 2008 based on CPI =…

Q: The only kind of interest rate that can be used in the interest formulas is: (EXPLAIN YOUR ANSWER) A…

A: In a market for loanable funds and securities, a lender receives interest rate and a borrower pays…

Q: Distinguish between nominal and real interest rates. Which is more relevant in making investment and…

A: Inflation defines the average amount of increment in price of final commodities and services. It is…

Q: Why is the GDP deflator not an accurate measure of inflation as it impacts a household?

A: A price index number is a macroeconomic measure that compares a series of prices in different time…

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: 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: Which of the following Statment is not correct ? a)National income should be equal to the country's…

A: Statement 1 ‘National income should be equal to the country's money supply’ is not correct.

Q: What is the difference between the Nominal Interest Rate and the Real Interest rate?

A: A continuous increase in the general price level is referred to as inflation.

Q: The fresh deposits at the bank is $25000 and the LRR is 20% Calculate the total money created in…

A: LRR refers to legal reserve ratio. It is the percentage of deposits that the banks are required to…

Q: Why is it difficult to measure an economy’s real rate of interest?

A: Real interest rate refers to the interest rate that adjusted with the inflation. Real interest rate…

Q: 64: Suppose that in the base year, GNP = $1000 billion. Since the base year, cash GNP has expanded…

A: Here according to the given information, cash GNP implies nominal GDP, while genuine GDP implies…

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: people typically pay more attention to their real income or their nominal income?

A: GDP is used to explain the overall economic welfare of a nation. It is used to calculate the…

Q: State at least three differences between GDP deflator and CPI as the measure of inflation rate

A: Inflation refers to an increase in the general price level of different goods and services in an…

Q: At the beginning of the year, what is the nominal rate of interest and what is the real rate of the…

A: Interest rate is the percentage amount charged by the lender from the borrower to use his money for…

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: ers to the professed interest rate.   a Nominal   b Effective   c Ordinal   d Actual

A: Professed  interest rate or stated rate is the rate that banks or lender shows the interest rate…

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: 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: 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: What is called as the flow of the payments and the receipts for goods and the services and the…

A: The continual flow of products and services production, revenue, and expenditure in an economy is…

Q: Do you think a negative nominal interest rate can happen?  What about a negative real interest rate?…

A: When people borrow money from the lender, a proportion of the amount borrowed is paid additionally…

Q: What is meant by a “market basket rate”?

A: A permanent bundle of goods and services that are purchased and sold in the market throughout the…

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: How GNI is calculated?

A: Define GNI  Answer: Gross National Income includes all those income which is earned by the people…

Q: Define the Nominal Interest Rates?

A: The interest rate refers to the payment rate that is charged by a lender on a borrower for using the…

Q: Illustrate how we may convert actual dollars into constant dollars of the base year or vice versa?

A: Constant-dollar amount estimate all potential future cash flows in constant dollars to find equal…

Q: Name several forms of indexing in the private and public sector.

A: Indexing refers to the measure/indicator of something. In the financial market, indexing is used as…

Q: Assume that Sarah agrees to lend $100 to Sam for one year. Sam agrees to pay Sarah $117 at the end c…

A: As it is given that Sarah lends $100 for one year to Sam Sam after one year pays = $117 inflation…

Q: On the following graph, use the orange points (square symbol) to plot the nominal Interest rates for…

A:

Q: The rate of interest written on a contract between a borrower and a lender is the   a. expected…

A: The central-bank lends money to its member banks. The rate at which the central-banks loan them…

Q: plain the meaning of real vs nominal of a particular macroeconomic variable.

A: Introduction Macroeconomics is the study of the behaviour of the aggregates of the economy as a…

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…