Interest rates adjusted for the effects of inflation Group of answer choices are nominal variables; inflation...
Interest rates adjusted for the effects of inflation
Group of answer choices
are nominal variables; inflation is a real variable.
and inflation are real variables.
and inflation are nominal variables.
are real variables; inflation is a nominal variable.
Homework Answers
Interest rates adjusted for the effects of inflation - are real variables; inflation is a nominal variable
(Real variables are calculated on the basis of constant prices whereas nominal variables are calculated on the basis of current prices. Here interest is adjusted for inflation which means that rate is indexed as per the time period to ensure continuity in its value as per changes over time, and is hence considered a real variable.)
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Interest rates adjusted for the effects of inflation
Group of answer choices
are nominal variables; inflation...
In a period of Inflation real interest rates will be greater than nominal interest rates.
In a period of Inflation real interest rates will be greater than nominal interest rates. O True O False
Inflation, nominal interest rates, and real rates. The minister of finance for the State of Tranquility...
Inflation, nominal interest rates, and real rates. The minister of finance for the State of Tranquility has just estimated the expected inflation rate for the coming year at 6.59%. If the real rate for the coming year is 4.32%, what should the nominal interest rates at the central bank of the State of Tranquility be for the coming year? Use the approximate nominal interest rate equation and the true nominal interest rate equation to determine the rates. Using the approximate...
A person received 4% nominal interest. The inflation rate was -2% and the tax rate was...
A person received 4% nominal interest. The inflation rate was -2% and the tax rate was 25%. This person received an after-tax real interest rate of 5%. Group of answer choices True False
4. Inflation and interest rates The following table shows the average nominal interest rates on six-month...
4. Inflation and interest rates The following table shows the average nominal interest rates on six-month Treasury bills between 1997 and 2001, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 1997 to 2001. (All rates are rounded to the nearest tenth of a percent.) Year Nominal Interest Rate Inflation Rate (Percent) (Percent) 1997 5.2 2.3 1998 4.8 1.5 1999 4.8...
2 Understanding and Calculating Inflation Real and Nominal Interest Rates in the United States, 1960-2015 Percent...
2 Understanding and Calculating Inflation Real and Nominal Interest Rates in the United States, 1960-2015 Percent 16 14 Nominal Real 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year Figure 2: Real and nominal interest rates in the US, 1960-2015 1. State the Fisher equation. What do the three variables in Fisher's equation represent? 2. Consider Figure 2. Why do negative real interest rates occur? Are they a problem for the economy? 3. In Figure 2,...
Inflation and interest rates The following table shows the average nominal interest rates on six-month Treasury bills between 2004 and 2008
4. Inflation and interest rates The following table shows the average nominal interest rates on six-month Treasury bills between 2004 and 2008, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 2004 to 2008. (All rates are rounded to the nearest tenth of a percent.)On the following graph, use the orange points (square symbol) to plot the nominal interest rates for...
(Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of...
(Related to Checkpoint 9.6) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 4.5 percent and the expected inflation rate is 7.3 percent?
Problem 2-4 (similar to) (Inflation and interest rates) What would you expect the nominal rate of...
Problem 2-4 (similar to) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 3.7 percent and the expected inflation rate is 7.1 percent? The nominal rate of interest is %. (Round to two decimal places.)
"Real GDP" is "nominal GDP" adjusted to a base years prices so that the real quantity...
"Real GDP" is "nominal GDP" adjusted to a base years prices so that the real quantity growth can be determined independent of inflationary effects. Group of answer choices True False
1. Explain briefly how to convert nominal variables into real variables 2. Suppose nominal income in...
1. Explain briefly how to convert nominal variables into real variables 2. Suppose nominal income in year 2000 is $3000 and the price index in year 2000 is 150, what is the real income of year 2000? 3.Suppose the nominal output this year is $1000 billion while the current price level is measured at 120, what is the real output this year ? 4. Jane makes a loan at 3% interest rates. The inflation rate is 2%. What is the...
Inflation, nominal interest rates, and real rates. The minister of finance for the State of Tranquility has just estimated the expected inflation rate for the coming year at 6.59%. If the real rate for the coming year is 4.32%, what should the nominal interest rates at the central bank of the State of Tranquility be for the coming year? Use the approximate nominal interest rate equation and the true nominal interest rate equation to determine the rates. Using the approximate...
2 Understanding and Calculating Inflation Real and Nominal Interest Rates in the United States, 1960-2015 Percent 16 14 Nominal Real 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year Figure 2: Real and nominal interest rates in the US, 1960-2015 1. State the Fisher equation. What do the three variables in Fisher's equation represent? 2. Consider Figure 2. Why do negative real interest rates occur? Are they a problem for the economy? 3. In Figure 2,...
4. Inflation and interest rates The following table shows the average nominal interest rates on six-month Treasury bills between 2004 and 2008, which determined the nominal interest rate that the U.S. government paid when it issued debt in those years. The table also shows the inflation rate for the years 2004 to 2008. (All rates are rounded to the nearest tenth of a percent.)On the following graph, use the orange points (square symbol) to plot the nominal interest rates for...
Problem 2-4 (similar to) (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 3.7 percent and the expected inflation rate is 7.1 percent? The nominal rate of interest is %. (Round to two decimal places.)
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