You bought some shares of stock and, over the next year, the price per share increased by 7 percent and the CPI increased by 10 percent. You experienced both a nominal gain and a real gain a nominal gain and a real loss a nominal loss and a real gain both a nominal loss and a real loss.
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You bought some shares of stock and, over the next year, the
both a nominal gain and a real gain
a nominal gain and a real loss
a nominal loss and a real gain
both a nominal loss and a real loss.
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- You are given the following information about the economy: the nominal interest rate = 10 percent, and the real rate of interest = 3 percent. The inflation premium isSuppose the nominal interest rate on savings deposits is 3% and inflation is running at 5%. What happens to your money and the real interest rate?If inflation is expected to increase, A. the nominal interest rate will increase. B. the nominal interest rate will decrease. C. the real interest rate will increase. D. the nominal interest rate will remain the same
- If you deposit money in the bank for one year scenario 1: nominal interest rate = 10%, inflation rate = 0%  Scenario 2: normal interest rate = 25%, inflation rate = 15% In which scenario does the real value of the deposit grow the most? Explain.The real interest rate in Africa is 1.1%. In 2019, the inflation rate was 1.6%. The expected inflation rate in 2021 is 1.4%. Calculate by how many percentage points we expect the nominal interest rate to change between 2019 and 2021.You are given the following information about the economy: the nominal interest rate = 8 percent, and the real rate of interest = 4 percent. The inflation premium is Multiple Choice 4 percent. 12 percent. 8 percent. 2 percent.
- Some economists argue that since inflation a. raises the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. b. raises the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjust. c. reduces the real value of fixed nominal wages, a little inflation may make it easier for labor markets to adjust. d. reduces the real value of fixed nominal wages, a little inflation may make it harder for labor markets to adjustAssume 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 partsAmy Coney Barrett puts money into an account at Ruth Bader Ginsburg Bank. 12 months later she sees that she has 6 percent more euros and that her money will buy 4 percent more Ivanka Trump bobbleheads which perfectly track nominal national output (meaning statistically they move together). The nominal interest rate was Question 21 options: 10 percent and the inflation rate was 6 percent. 6 percent and the inflation rate was 2 percent. 4 percent and the inflation rate was 2 percent. 10 percent and the inflation rate was 4 percent.
