In the first year, inflation is 2.75% and the nominal interest rate for both fixed and variable rate loans is 5%. Given this information, the real interest rate for fixed-rate loans is ____% and the real interest rate for variable rate loans is ____%.

Q: What is the real interest rate if the nominal interest rate is 7.73% and the expected inflation rate…

A: The real interest rate is the inflation-adjusted interest rate. It shows the real cost of funds from…

Q: The CPI is 120 in year 1 and 150 in year 2. All inflation is anticipated. If Sonali Bank charges a…

A: In macroeconomics, interest can be nominal or real. The real interest rate is the nominal interest…

Q: If the Consumer Price Index was 90 in one year and 100 in the following year, then the rate of…

A: Inflation is the general increase in price level.There are different levels of inflation.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: Calculate the nominal interest rate when real interest rate is 5% and inflation is 2%

A: # According to fisher's equation, we know that the real interest rate is the difference between…

Q: According to the price index, it costs 200 dollars to buy a typical basket of goods in one year.…

A: 220-200/200*100 20/200*100=10

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: )Suppose that on January 1, 2019 a bank lends $20,000 to a person. The bank and the individual both…

A: The inflation rate is basically an increase in the price level from one period to another. If the…

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 implied real interest rate of 3-month Treasury bills (U.S. government debt of 3-month maturity)…

A: We know, nominal interest rate = Real interest rate + inflation rate

Q: Income in year 1: $50,000 income in year 2: $52,000 CPI in year 1 = 100 CPI in year 2 = 110…

A: Nominal income in year 2 increased by 2000. Real income in year 1=$50,000 Real income in year…

Q: A certain country calculates inflation using a consumer price index (CPI). Between 2016 and 2017 the…

A: Answer to the question is as follows :

Q: rate of​ inflation

A: The inflation calculates the increment in price level. There are different types of inflation:…

Q: Suppose the nominal interest rate is 10 percent, the tax rate on interest income is 28 percent, and…

A: Given, Nominal interest rate = 10% Tax rate = 28% Inflation rate = 6%

Q: The CPI equals 1.00 in year one and 1.40 in year two. If the nominal wage is $3000 in year one and a…

A: The Consumer Price Index measures the change in the price level of a basket of goods and services.…

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: The Fisher Effect equation can be used to determine the real interest rate. Use this equation to…

A: Given: Nominal interest rate (i) = 0.090 Inflation rate π=0.005

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: If the nominal interest rate on an asset is 10% and inflation is also 8%, what is the real interest…

A: The nominal interest rate is the percentage increase in money you pay the lender for the use of the…

Q: For an imaginary economy, when the real interest rate is 7 percent, the quantity of loanable funds…

A:

Q: If the price index in Year 1 is 115 and the price index in Year 2 is 120, the rate of inflation…

A: We will calculate it as follows  Price index in simple words we can say that Price index, measure of…

Q: Suppose Cho is a cinephile and buys only movie tickets. Cho deposits $3,000 in a bank account that…

A: Cho's deposits $3000 in a bank account that pays an annual nominal interest rate of 10%. The price…

Q: 20.Which of the following statements is correct?   a The interest rate that is usually reported is…

A: c If the nominal interest rate has decreased and the real interest rate has also decreased,…

Q: Assume a hypothetical economy that produces only one good – Peanut Butter. In year 1, the quantity…

A: Hi, thanks for the question. Since the information for question three is not given (question a, e…

Q: this year the Malaysian CPI is 125 and last year was 120, then we know that a. The price level has…

A: If this year Malaysian CPI is 125 and last year was 120 then we know that it the price level is…

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: If banks expect that the rate of inflation in the coming year will be 4.95% and they want a real…

A: The real interest rate is the adjusted interest rate that doesn’t include the effect of inflation…

Q: Which of the following would cause the real interest rate to be negative? a.When the nominal…

A: The Fisher calculation forecasts that the nominal rate would equivalent the equilibrium real rate…

Q: Suppose that the investment function is I = 3,500 − 100r, where r is the real interest rate (in…

A: What Is an Investment? An investment is anything you buy with the hope of making money off of it or…

Q: Because there isn't one single measure of inflation, the government and researchers use a variety of…

A: GDP deflator for the year is calculated by dividing the value of all the goods and services produced…

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: A country produces only ice cream and cake in the quantities and prices listed below. Use 2011 as…

A: Inflation refers to an increase in the price levels over a period of time. Inflation is measured as…

Q: Assume you just deposited $1,000 into a bank account. The current real interest rate is 2%, and…

A: The relation b/w the nominal & real interest rate, as well as inflation, is represented by the…

Q: Calculate what will be the nominal interest rate at any given loan if the inflation is 3.2% and the…

A: The information being given is:- Inflation rate = 3.2% Real interest rate = 0.8% We have to…

Q: how are borrowers and lenders affected when the nominal rate is 9%, the inflation premiums on loans…

A: The nominal interest rate refers to the interest rate charged on loans without taking inflation into…

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: If the nominal interest rate was 12% and the inflation rate was 10% in 1980, while the nominal…

A: Given information: In 1980, Nominal interest rate: 12% Inflation rate: 10% In 2001, Nominal…

Q: If inflation is expected to​ increase,   A. the nominal interest rate will increase.   B.…

A: Real Interest Rate: The real interest rate is the rate that excludes or does not account the…

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: For a given real interest rate, a decrease in the inflation rate would   a. increase the…

A: We know,Real interest rate = Nominal interest rate – inflation rateTherefore, a decrease in…

Q: Analyze the computation of inflation from a GDP deflator, and the accuracy it holds as compared to…

A: The GDP deflator is identified as the inflation in an economy, which is calculated by dividing…

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: 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: f the nominal interest rate is 10% and the inflation rate is 5%. What is the real interest rate? (Do…

A: The real interest rate is the rate of interest an investor, saver or lender receives after allowing…

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

A: As per Fisher Effect, Nominal Interest Rate - Inflation Rate = Real Interest Rate

Q: Consumers of the economy purchase all primary products, manufacturing products and services shown in…

A: Meaning of Inflation: The term inflation refers to the situation under which there being an…

Q: Bangladesh is an agricultural country. They produce the majority of agricultural products for their…

A: There are two types of inflation, demand-pull inflation and cost push inflation. In other words, the…