If the nominal interest rate is 80% and the rate of inflation is 50%, then the exact real rate of interest is
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If the nominal interest rate is 80% and the rate of inflation is 50%, then the...
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate?nominal interest rate: = _______ %All else equal, if inflation decreases by 0 %, what will happen to the nominal interest rate?The real interest rate will decrease by 0 %.The nominal interest rate will decrease by 0 %.The nominal interest rate will increase by 0 %.The real interest rate will increase by 0 %.What do economists call the relationship between the nominal interest...
The nominal interest can be negative if the inflation rate is greater than the nominal interest rate. can be negative if deflation occurs. can be negative if inflation is unexpected. will never be negative. can be negative when the real interest rate is negative.
The real interest rate A. is equal to the nominal interest rate minus the inflation rate. B. is the interest rate that adjusts GDP for changes in prices. C. is equal to the inflation rate minus the nominal interest rate. D. is the interest rate that is quoted on a financial debt and a firm's assets.
If the inflation rate is zero, then A.) both the nominal interest rate and the real interest rate can fall below zero. B.) the nominal interest rate can fall below zero, but the real interest rate cannot fall below zero. C.) the real interest rate can fall below zero, but the nominal interest rate cannot fall below zero. D.) neither the nominal interest rate nor the real interest rate can fall below zero.
The nominal interest rate is 12%. The inflation rate is 3%. The real interest rate is equal to %.
If the inflation rate is 3% and the nominal interest rate is 8%, what is the real interest rate? Your answer is referred to as the real pre‐tax interest rate.
a. What is the relationship between real interest rate, nominal interest rate and inflation rate? b. What are the reasons for very high nominal interest rates in the 1980s? c. Explain ex-ante real rate and ex-post real rate.
If the nominal interest rate is 2% and the real interest rate is 1%, inflation is:A. -1 %.B. 0 %C. 1 %.D. 2 %.
Suppose the nominal interest rate equals 9%, the expected inflation rate is 5%, and actual inflation turns out to be 3%. In this case, the: a. ex ante real interest rate is 4%. b. ex post real interest rate is 4%. C. ex ante real interest rate is 6%. d. ex post real interest rate is 2%
What is the real interest rate if the nominal interest rate is still 8% but inflation is 1%? Does it cost more or less to borrow than when inflation was 3%?