Suppose banks are issuing personal loans at 9%. If expected inflation is 3%, then the nominal interest rate is _____ and the real interest rate is _____.
A) 6%; 9%
B) 9%; 6%
C) 9%; 3%
D) 6%; 12%
Correct Answer:
Verified
Q209: Unanticipated inflation:
A) increases the value of money.
B)
Q222: The nominal interest rate equals the real
Q222: Suppose that a bank wishes to make
Q223: Use the following to answer questions:
Figure: The
Q224: The _ interest rate _.
A) nominal; can
Q225: Unanticipated inflation:
A) helps those on fixed incomes.
B)
Q233: A drop in the inflation rate is
Q238: Suppose that the nominal rate of interest
Q239: The threat of future inflation:
A) makes people
Q240: A fixed interest rate of _% with
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