The price level was 118.3 in 1988, 124.0 in 1989, and 130.7 in 1990. What were the rates of inflation for 1989 and 1990? If people expect the rate of inflation to be the average rate of inflation for the previous 2 years, what was the expected rate of inflation for 1991? The nominal interest rate in 1991 was 5.4 percent. What was the real interest rate?

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: 7. Interest, inflation, and purchasing power Suppose Susan is an avid reader and buys only comic…

A: The interest rate which is being adjusted for inflation is known as the real interest rate. It…

Q: 5. Interest, inflation, and purchasing power Suppose Kate is a cinephile and buys only movie…

A: Initially, The purchasing power of kate 1000 $ deposit is 100 Movie tickets(1000/10)   When…

Q: What are the types of Inflation?

A: Inflation is said to a sudden rise in the prices of the goods and services over a period of time in…

Q: Suppose that the nominal interest rate is equal to 4.2% and the inflation rate over the same period…

A: Real interest is the interest rate adjusted after inflation. It adjusts the observed market interest…

Q: The markets in general are paying a 2% real rate of return. Inflation is expected to be 5%. ABC…

A: Risk-free rate of return = Real risk-free rate + Expected rate of inflation+ Risk premium

Q: There is a persistent fear that there will be a high level of deflation. Many economists warn that…

A:

Q: If the nominal interest rate is 18 percent and the real interest rate is 12 percent, the inflation…

A: Inflation is the rise in the general price level of the economy. Over time, the price of goods and…

Q: Assume that the price of a market basket of goods and services is $2,000 in the base period, $2,060…

A: The price of a market basket of goods and services is $2,000 in the base period, $2,060 one year…

Q: Knowing that the average annual accumulated inflation in 2018 was 3.75%, calculate how much the…

A: Inflation is an economic concept that is defined as a rise in the general price level of goods and…

Q: What is the inflation rate in 2019? Has it increased or decreased since 2018 and by how much?  If…

A: Inflation rate in 2019 = Percentage increase in GDP Deflator from 2018 to 2019. Inflation rate in…

Q: What are the impacts of inflation for borrowers and savers

A: The impact of inflation on borrowers: It permits the borrowers to pay back the money, whose value…

Q: OC. The statement does not make sense. The value of a penny is always 1 cent. OD. The statement does…

A: Relative change in price from 1988 to 2009 is 300%, while the overall rate of inflation from 1988 to…

Q: rate of​ inflation

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

Q: Assume that in 1974, interest rates were 7.443% and the rate of inflation was 12.065%. What was the…

A: Given :  In 1974,nominal interest rate=7.443%  inflation rate =12.065%.

Q: If in the banking sector the nominal interest rate is 3% and inflation rate is 1.7%  Calculate what…

A: The information being given is:- Nominal interest rate in banking rate = 3% Inflation rate = 1.7% We…

Q: 14. Inflation is the rate at which prices of goods and services increase. In the Fall of 1973, in a…

A: Inflation is the rise in the aggregate price level. The inflation would result in the price level of…

Q: Suppose that you also take out a $1,000 loan at the Cavalier Credit Union. The loan agreement…

A: First, we need to understand the difference between the nominal interest rate and the real interest…

Q: What is the value of inflation when real interest rate is 6% and the nominal interest rate is also…

A: # The difference between Nominal interest rate and real interest rate gives us the value of…

Q: What is the rate of Inflation in 2016 if the consumer Price Index (CPI) at the end of 2015 was 175…

A: CPI is measured using fixed basket of goods.

Q: Calculate inflation if real interest rate is 12% and nominal interest rate is 15%

A: The Given information is as follows:- Real interest rate = 12% Nominal interest rate = 15% Inflation…

Q: 4. Inflation and interest rates The following table shows the average nominal interest rates on…

A: Nominal interest rate alludes to the interest rate prior to considering expansion. Nominal can…

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: You lend $1,012 to a friend and he agrees to pay you back next year plus he will pay you interest of…

A: Given:Principal=$1,012Rate of interest=7.25%Period=1 year

Q: Suppose, in the base year, a typical market basket purchased by an urban family cost $250. In Year…

A: In economics and finance, an index is a statistical measure of change in a representative group of…

Q: how important is the inflation for the common people in the community? explain.

A: The growth in the average price level of a basket of selected goods and services in an economy over…

Q: Suppose you make a loan of $100 that will be repaid to you in 1 year.if the loan is denominated in…

A: Nominal intrest is total of real intrest and rate .Increase in rate can cause increase in nominal…

Q: Last year the jones family earned $40,000. This year their income is $42,000. If the inflation rate…

A: The nominal wage or income of households changes as the inflation changes. They have a positive…

Q: Let us assume you have $1000 to spend on buying books. Each book costs on average $50 and are…

A:

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: How might a rapid rise in inflation harm you?  How might a rapid rise in inflation help you?  In…

A: Inflation refers to a rise in the prices of goods and services in an economy during a year. This…

Q: if inflation is running at 8% and you want to negotiate a 2% raise in your salary, how large a raise…

A: inflation is  at 8% and  want to a 2% raise in  salary,

Q: If inflation rate is 1% and nominal interest rate is 2.1%  What will be the real interest rate

A: The given information is as follows:- Inflation rate in the economy = 1% This shows the general rise…

Q: Which of these is not a negative effect of inflation? a. It lowers down the value of money b. It…

A: Inflation is the gradual loss of a currency's buying value over time. The increase in the average…

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 the CPI was 110 last year and is 121 this year, what is this year’s rate of inflation? What is…

A: CPI or the Consumer Price Index refers to the price indices for the basket of commodities used for…

Q: If the nominal interest rate is 5 percent and the inflation rate is 2 percent, what is the real…

A: Nominal interest rate is the rate of interest before the adjustments of inflation. given: Nominal…

Q: Suppose you took out 20,000 in student loans at a fixed interest rate of 5%. Assume that after you…

A: Inflation is the rise in general price level where a unit of currency could purchase less than it…

Q: Calculating and categorizing inflation This table indicates the historical level of the Consumer…

A: Answer: The formula of inflation using CPI is given below:…

Q: A. Find the real value of your 40,000 salary for each of the next three year's. year1? year2?…

A: a. The real value can be calculated by using the following equation:

Q: Inflation is defined as increases in the average prices in the economy. The February 2022 inflation…

A: Inflation is defined as the rise in the average price level of commodities and services in the…

Q: What does it mean when the CPI is higher this year than last? Select one: a. The rate of inflation…

A: CPI or consumer price index is given by the formula: CPI= ( Cost of the market basket in current…

Q: You take out student loans to help pay for your degree at a 5% annual interest rate. Assume the bank…

A: A "real interest rate" is an interest rate that has been adapted to inflation. To work out a real…