13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25%
13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
I need help with #13 please
Transcribed Image Text:11:06
11) A
bond
D) deposit
interest rate to be
chance of default will cause the
A) more variable; lower
B) less variable; higher
C) higher; lower
D) higher; higher
5G UC ll 82%
B)
12) Which of the following statements about
nominal interest and real interest is true?
A) Nominal interest is a yearly rate
and real interest is a monthly rate.
Nominal interest does not adjust
for inflation, whereas real interest
does.
C) Nominal interest is what the lender
receives and real interest is what
the borrower pays.
D) Nominal interest and real interest
are two ways of saying the same
thing.
13) If a bank is lending money at 6.25% while
the government is lending money at 8.25%
and the rate of inflation is 3.5%, what is
the real interest being earned by the bank?
A) 2.00%
B) 2.66%
C) 2.75%
D) 6.25%
14) If the real interest rate is 7.5% and the rate
of inflation is 3%, what is the nominal
interest rate?
A) 4,50%
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