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% inflation

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% inflation

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 10SQ

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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% inflation