Question : 41) If Mr. Garrison paid an interest rate of 4% : 1381102

 

41) If Mr. Garrison is paid an interest rate of 4% on his savings, but the inflation rate is 7%, the real interest rate Mr. Garrison earns is

A) 28%.

B) 4%.

C) -3%.

D) -7%.

 

42) You want to make a 10% real return on a loan that you are planning to make, and the expected inflation rate during the period of the loan is 4%. You should charge a nominal interest rate of

A) -6%.

B) 6%.

C) 10%.

D) 14%.

 

43) Lola wants to make an 6% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge an interest rate of

A) 1%.

B) 6%.

C) 11%.

D) 16%.

 

44) If the inflation rate is smaller than the nominal interest rate, the real interest rate is

A) positive.

B) negative.

C) zero.

D) either positive or zero.

45) Eliza wants to borrow $100 from Sandy. Sandy wants to make 4% real return on his money, so they both agree on a 4% interest rate paid next year. Eliza and Sandy did not anticipate any inflation, yet the actual inflation turned out to be -5% next year. In this case,

A) Eliza will pay an 9% real interest rate.

B) Sandy is better off.

C) Eliza will pay a 4% nominal interest rate.

D) all of the above

 

46) Dean borrows $400 from Tim.  Tim wants to make a 10% real return on his money, so they both agree on a 10% interest rate paid next year. Dean and Tim did not anticipate any inflation, yet the actual inflation turned out to be 4% next year. In this case,

A) Tim is better off.

B) Dean will pay $56 a year from now on.

C) Dean is better off.

D) Tim will receive more than 10% of real rate of return a year from now.

 

47) Which of the following is a cost of anticipated inflation?

A) Debtors are made worse off.

B) If people are not fully informed about the price level changes, resources will be misallocated.

C) The degree of risk associated with investments in the economy increases.

D) Creditors are made worse off.

 

48) Stopping inflation

A) can only benefit the economy, because the price level will be reduced.

B) may be costly, if the inflation is stopped by inducing a recession.

C) may be costly, but the benefits of stopping inflation will always outweigh the costs of such actions.

D) will have no benefits or costs associated with it.

49) Which of the following statements is FALSE?

A) Whether you gain or lose during a period of inflation depends on whether your income rises faster or slower than the prices of the things you buy.

B) Inflation that is higher than expected benefits debtors, and inflation that is lower than expected benefits creditors.

C) There are no costs or losses associated with anticipated inflation.

D) When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy increases.

 

50) When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy

A) increases.

B) decreases.

C) remains stable.

D) falls to zero.

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more