It is the increase in the prices for goods and services from one year to another, thus decreasing the purchasing power of money. A. appreciation B. depreciation C. inflation D. interest
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It is the increase in the prices for goods and services from one year to another, thus decreasing the
A. appreciation
B.
C. inflation
D. interest
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Solved in 3 steps
- Assume the nominal interest rate is 17 percent and the expected rate of inflation is 12 percent. Calculate real rate of interest.The__________________ is the nominal interest rate minus the rate of inflation. a)annualized interest rate b)nominally adjusted c)real interest rate d)real GDPThe.... rate is equa to the ...... rate ...... the ....... rate a) real interest / nominal interest / minus / inflation b) nominal interest / real interest / minus / inflation c) real interest / nominal interest / plus / inflation d) nominal interest / real interest / plus / inflation e) inflation / nominal interest / minus / real interest
- Which lending agreement represents the highest real rate of return for a bank when it lends its money to a customer? A) a nominal interest rate of 11% with 5% inflation B) a nominal interest rate of 19% with 15% inflation C) a nominal interest rate of 8% with 1% inflation D) a nominal interest rate of 12% with 7% inflationThe nominal interest rate is equal to ? (a).Real interest +inflation (b). Real interest *inflation (c). Real interest -inflation (d)Real interest / inflation 2. Net investment is ......? (a). Gross investment minus household investment. (b). Gross investment minus government investment (c). Gross investment minus capital consumption allowance. (d). Gross investment minus inflationReal interest rate is equal to Nominal Interest rate when inflation is 2% True/False
- the nominal rate on a $1,000 investment is 12.75 percent. the expected rate of inflation is 2.25 percent. find the exact expected real rate of interest .(b) It is given that the nominal income rose by 5% from the base year to the subsequent year. Since the growth in nominal income is less than the rate of inflation, the family is worse off in terms of what they are able to buy.Please give back one of my other questions that was the same as this. I had to resubmit this as I incorrectly typed the percentages before. 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 5.25% nominal interest rate. He expected inflation to be 1.50%. Instead, inflation is −2.00% (deflation). What is the real interest rate that Herb is expected to pay, and that he is actually paying?
- Explain the meanings of nominal interest rate and realinterest rate. How are they related?An animal farmer has 100 cows and each year there are 10 new born calfs (buzagı). That is, his business's real growth is 10%. The (nominal) interest rate is 15% while there is 10% inflation. What must happen in the FM so that the farmer decides to sell all cows and supply the revenue (funds) to the financial system.Assume that in Azerbaijan, Alyana deposits $5,000 in the bank for a single year. Given the following cases, answer the questions. CASE 1: inflation = 0%, nominal interest rate = 5% CASE 2: inflation = 5%, nominal interest rate = 10% CASE 3: inflation = 10 %, nominal interest rate = 15% In which case does the real value of your deposit grow the most? Assume the tax rate is 30%. In which case do you pay the most taxes? Compute the after-tax nominal interest rate,then subtract inflation to get the after-tax real interest rate for both cases. Answer all parts