f inflation is higher than anticipated, benefit(s) and if inflation is lower than anticipated, benefit(s). O A. both debtors and creditors; no one O B. no one; both debtors and creditors O C. creditors; debtors O D. debtors; creditors If the interest rate on a loan is 4 percent and the actual inflation rate is 6 percent, the real interest rate is 10 percent. O A. True O B. False

f inflation is higher than anticipated, benefit(s) and if inflation is lower than anticipated, benefit(s). O A. both debtors and creditors; no one O B. no one; both debtors and creditors O C. creditors; debtors O D. debtors; creditors If the interest rate on a loan is 4 percent and the actual inflation rate is 6 percent, the real interest rate is 10 percent. O A. True O B. False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 3 In Germany, banks are paying a positive interest rate on peoples' savings, as a result O a. Savers are worse off if the inflation rate in Germany is zero O b. Savers are better off if the inflation rate in Germany exceeds the nominal interest rate Oc. Savers are worse off if the deflation rate in Germany is zero O d. Savers are better off if the deflation rate in Germany is zero
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Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate? nominal interest rate: = I All else equal, if inflation decreases by 0%, what will happen to the nominal interest rate? o The real interest rate will decrease by 0%. o The nominal interest rate will decrease by 0 %. o The nominal interest rate will increase by 0%. o The real interest rate will increase by 0%. 1 What do economists call the relationship between the nominal interest rate and the inflation rate? o shoeleather costs Leontief paradox 86 • Taylor rule Fisher equation
Assuming inflation is negative (deflation), then the nominal interest rate a) must always be smaller than the real interest rate. b) could be larger or smaller than the nominal interest rate, depending on the rate of inflation. c) would normally be larger than the nominal interest rate. O d) increases exactly as fast as inflation. O e) must always be larger than the real interest rate.
If the nominal interest rate is a constant 15 percent and anticipated inflation falls from 10 percent to 7 percent, the real interest rate would change from Select one: O A. 8 to 5 percent. O B.7 to 9 percent. OC5 to 8 percent. O D. 15 to 10 percent.
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on The quality change bias is most likely to put The quality change bias is most likely to put_ into the CPI and so.... into the CPI and so O a. a downward bias; understate O b. a random bias; randomly overstate or understate O c. an upward bias; understate O d. a downward bias; overstate e. an upward bias; overstate Clear my choice the inflation rate.
The CPI is more commonly used as a gauge of inflation than the GDP deflator is becaust the O a. GDP deflator cannot be used to gauge inflation. O b. CPI is easier to measure. O c. CPI better reflects the goods and services bought by consumers. O d. CPI includes more goods and services that the GDP deflator does. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
You are given the following information about the economy: the nominal interest rate = 8 percent; the real rate of interest = 6 percent. The inflation premium is Multiple Choice O 2 percent. O 8 percent. 6 percent. O O 14 percent. MacBook Pro % 95 74 Q $ #3 M 66 E R T & 27 Y * 8 U A ll 61 0
Darshan needs to borrow money to become a nurse practitioner. Suppose that compensation of nurse practitioners is expected to increase. Assuming nothing else changes, this means that if Darshan borrows now, his cost of borrowing money is expected to due to the following factor: O Decreasing preferences for future consumption. O Rising benefits of becoming a nurse practitioner. Rising compensation of nurse practitioners provokes inflation. Which of the following events could decrease the cost of money? Check all that apply. The Federal Reserve purchases Treasury securities held by banks Inflation increases The federal deficit decreases The Federal Reserve sells Treasury securities to banks decrease increase
Suppose you start saving for retirement when you are 26 years old. You invest $5,000 the first year and increase this amount by 3% each year to match inflation for a total of 20 years. The interest rate is 9% per year. 1. How much will you have in account immediately after making the last deposit at age 45. OA. $56,478 O B. $316,525 O C. $307,734 O D. $617,544 2. How much will you have, if the interest rate was only 3% per year (instead of 9%)? OA. $180,611 OB. $168,704 C. $97,087 O D. $175,351