if the nominal interest rate is 18 percent and the real interest rate is 10 percent, the inflation rate is

Q: When there is high inflation (a) the nominal interest rate is approximately equal to the real…

A: In an economy, inflation rate has an influence on the nominal interest rate and real interest rate…

Q: Solve this attachment.

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

Q: The attached table gives the purchases of a typical consumer in Colorado Springs. These consumers…

A: Inflation is termed as general increase in prices and fall in purchasing power of currency. It is…

Q: When the inflation rate falls from 8% to 2% in an economy, its general price level is rising.

A: The inflation rate is the change in the general price level and it is positive means the general…

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: Assume the nominal interest rate is 17 percent and the expected rate of inflation is 12 percent.…

A: The real interest rate refers to the inflation adjusted interested rate. It can be calculated by…

Q: What is the average inflation rate?

A: The rise in the price of services and commodities over time is said as inflation.

Q: If the nominal interest rate is 10 percent and the inflation rate is 4 percent, then the real…

A: Nominal interest rate is the current rate of interest.Real interest rate is the change in interest…

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: According to the Fischer equation, if the nominal interest rate is 8% and inflation is running at 4%…

A: Nominal interest rate is the interest rate that is received or paid on a loan. Real interest rate…

Q: Can the issuance of government securities reduce the expectation of inflation?

A: Bond or security ownership is similar to owning a stream of future cash payments. These cash…

Q: The nominal interest rate will be less than the real interest rate when   A. the rate of inflation…

A: The correct option is (c).

Q: A typical consumption basket in Canada can be purchased for the following prices in two years: in…

A: Inflation refers to the increase in general price levels in an economy from one period to another.…

Q: If the interest rate on a one-year loan is 5%5% and the expected inflation rate is −2%−2% for the…

A: Real interest rate= Nominal interest - Inflation rate Real interest rate is the actual interest an…

Q: The nominal interest rate is 12%. The inflation rate is 3%. The real interest rate is equal to %.

A: The interest rate is calculated as a percentage of the principal, or the amount borrowed, which a…

Q: You are given a loan with a nominal interest rate of 5%. You must pay back this loan one year from…

A: The nominal interest rate the interest rate that you earn or pay on money that you lend or borrow;…

Q: The real interest rate is 5% per quarter and the inflation rate is 2% per quarter. Calculate the…

A: The inflation-adjusted return is a measure of return that takes into account the inflation rate…

Q: The relationship between nominal and real interest rates continues to hold when there is deflation…

A: In an economy, the difference between actual and expect interest rate will lead to affect the…

Q: Solve the attachment.

A: Inflation refers to the loss of purchasing power in the people's hands in lieu of the increase in…

Q: If the inflation rate is 2 percent and the real interest rate is 4 percent, the nominal interest…

A: In an economy, inflation and different types of interest rate such that real and nominal interest…

Q: Find the real interest rate prevailing if inflation is 2% and Nominal Interest rate is 3 times the…

A: The information given to us is:- Inflation = 2% Nominal interest rate = 3* inflation rate = 3*2 = 6%…

Q: Who would be the least affected by inflation? (Benefit from Inflation) a man with a fixed interest…

A: Inflation is the general increase in price level which lowers the purchasing power of all the people…

Q: Abhijit deposits $100 in a bank account that pays an annual interest rate of 5 percent. A year…

A: Deposit=$100Annual interest rate=5%Now,Value of deposit after one year=100+5%Value of deposit after…

Q: When the inflation rate rises, people who live on a fixed income will experience a decrease in their…

A: Inflation is defined as the general price rise of the goods in the economy.

Q: In order to make up for the future loss in purchasing power. the rate at which you earn interest…

A: Inflation is an economic phenomenon that refers to the persistent increase in the prices of goods…

Q: Suppose the nominal interest rate is 5 percent, the tax rate on interest income is 30 percent, and…

A: The real interest rate is the rate which we get after deducting the rate of inflation from the…

Q: Suppose a person works hard at a job after graduation and after her first year, her effort is…

A: A consumer like the person in the question is never bothered about the money in numerical terms…

Q: Sally has a credit card balance of ​$1,000. The credit card company charges a nominal interest rate…

A: The interest rate increase would result in an increase in the inflation. The increase in the…

Q: real interest rate is

A: Real interest rate is the rate which a person has after deducting the inflation Or price rise effect…

Q: Explain how the average inflation rates are calculated?

A: Inflation is a situation where the price of the commodity that is goods and services are rising in…

Q: Real interest rate is equal to Nominal Interest rate when inflation is 2% True/False

A: # nominal interest rate doesn't take into account the effect of inflation anthers it cannot be used…

Q: Ek 3 UK’s inflation has hit a 40 year high (CPI is 9.1% in June 2022). Evaluate the use of interest…

A: A widespread increase in the prices of goods and services in an economy indicates inflation, which…

Q: calculate the percentage of inflation rate: -If the price level rises from 100 to 102 over a year…

A: Inflation rate is the rise in the general price level over a period of time. If the inflation rate…

Q: Suppose you want to earn a real interest rate of 5%. For inflation rates of 0.0, 1.0, 2.0, …, 9.0,…

A: We know that the combined interest rate means that the relationship between inflation and the real…

Q: Which of the following is not an economic effect of inflation?

A: Inflation refers to the general rise in prices of goods and services in the economy. The rapid and…

Q: If the nominal interest rate is 10 percent and the real interest rate is 5 percent, the inflation…

A: Inflation rate: It is the rate of increase in the prices in a particular time period.

Q: The nominal interest rate is: A not adjusted by inflation. B less than the real rate of interest…

A: Option (A).

Q: The value of a price index in the base year is   0 100 200 The inflation rate The average cost of…

A: the price index refers to a normalized average of price relatives for a given class of products or…

Q: Sally has a credit card balance of ​$2,000. The credit card company charges a nominal interest rate…

A: Answer: Given, Nominal interest rate = 14% a year Inflation rate = 5% a year The formula to be used…

Q: The real interest rate in Africa is 1.1%.  In 2019, the inflation rate was 1.6%.  The expected…

A: The Fisher equation is a linear approximation of function representing the relationship between the…

Q: Consider a simple economy that produces only three products: hot dogs, torches and golf balls. Use…

A: CPI stands for consumer price index represent the cost of living which is ratio of change in cost of…

Q: The Nominal Interest rate and inflation rate in an economy is same.  What will be the real interest…

A: The interest rate which is irrespective of inflation is known as nominal interest rate. And the…

Q: If the real interest rate is 6% and the inflation rate is 12%, then the nominal interest rate equals…

A: Nominal interest rate=inflation/real interest rate =12/6=6

Q: Suppose the equilibrium real interest rate is 5% and inflation rate is 3%. Determine the equilibrium…

A: Real Interest rate = 5% Inflation rate = 3%

Q: Suppose that people expect inflation to equal 3 percent, but in fact prices rise by 5 percent.…

A: Inflation rate refers to rise in average price levels of goods and services produced in an economy…

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…