At full employment, an increase in the quantity ofmoney (ceteris paribus) can startSelect one:a. demand-pull inflation, as can an increase ingovernment expenditure.4b. demand-pull inflation, but an increase ingovernment expenditure cannot.c. cost-push inflation, but an increase ingovernment expenditure cannot.d. demand-pull and a cost-push inflation, ascan an increase in government expenditure.e. cost-push inflation, as can an increase ingovernment expenditure.%5^6MacBook Pro19&78(90Safari Touch ID te1 PEIon 5moodle31.upei.caAccessdeck Old-Moodle English (en)Suppose the tax rate on interest income is 50percent, the real interest rate is 3 percent, and theinflation rate is 4 percent. The real after-taxinterest rate isSelect one:a. 3.0 percent.b.-3.5 percent.c. 3.5 percent.d. -0.5 percent.e. 4.0 percent.An unanticipated deflation does all of the following

Cost-push inflation (also known as wage-push inflation) occurs when overall prices increase…

Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the inflation rate is 4 percent. The real after-tax interest rate is Select one: a. 3.0 percent. b. -3.5 percent. c. 3.5 percent. d 0.5 percent

Suppose the tax rate on interest income is 50 percent, the real interest rate is 3 percent, and the inflation rate is 4 percent. The real after-tax interest rate is Select one: a. 3.0 percent. b. -3.5 percent. c. 3.5 percent. d 0.5 percent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The real interest rate is 1 the market rate of interest charged by banks. 2 the rate of interest that banks charge their best customers. 3 the nominal rate of interest minus the inflation rate that individuals expect. 4 the expected inflation rate minus the cost of borrowing.
If the consumer price index was 100 in the base year and 103 in the following year, then the inflation rate was a. 3 percent. b.-3 percent. c. 1.03 percent. d. 0.3 percent.
If the nominal rate of interest is 5 percent for a bond issued by the United States Government and the inflation rate is 2 percent, the real rate of interest is ___. The nominal rate of interest will _______ if the inflation rate rises or increases to 6 percent (that is, the inflation rate increases by 4 percent). A. unknown; rise by 4 percent B. 3 percent; rise by 4 percent C. 3 percent; fall by 4 percent D. 7 percent; fall by 4 percent
Makayla bought a $1,000, 5-year inflation - indexed bond that had a real interest rate of 5.10% when the CPI was 248.615. A year later, the CPI decreased to 219.313. What amount of interest (rounded to the nearest cent) will she receive? a. $ 57.81 b. $51.00 c. $44.99 d. $ 27.10
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%
6. Taylor just received a 3% pay increase but the current rate of inflation is 4%. We can say that Taylor’s real wage has Select one: a. remained the same b. fallen by 1% c. risen by 1%.
The CPI inflation rate from 1982 to 2002 is ________ and from 2002 to 2022 is ________. The difference in the rates of inflation is ________. A. 46.9 percent; 33.7 percent; -13.2 percentage points B. 46.9 percent; 33.7 percent; -28.1 percentage points C. 88.4 percent; 50.9 percent; -42.4 percentage points D. 88.4 percent; 50.9 percent; -37.5 percentage point
Suppose you'll have an annual nominal income of $20,000 for each of the next three years, and the inflation rate is 5 percent per year. Hint: Present value = Future value = (1 + Growth in prices)* = Real value of next year's income = Next year's income ÷ (1+ Growth in prices) Instructions: Round your responses to the nearest whole dollar. a. Find the real value of your $20,000 salary for each of the next three years. Year 1: $ Year 2: $ Year 3: $ b. If you have a COLA in your contract, what is the real value of your salary for each year? Year 1: $ 19047 Year 2: $ 18144 Year 3: $ 17276
just answer part c , d and e notice that you can do it without the answer of part a and b
When lenders begin to expect higher levels of future inflation, a. Nominal interest rates today will fall as lenders try to maximize profits. b. Nominal interest rates today will rise and the price of consumption from a loan will fall. c. Nominal interest rates today will rise and the price of consumption from a loan will rise. d. There will be no change in nominal interest rates if the real rate of return remains greater than zero.
a. Examine the fundamental causes of a nation’s business cycle fluctuations. Also, examine the relationship between total spending by government and consumers in a nation and the location of the countries’ GDP on the business cycle. b. 1. Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses. 2. The Australian Bureau of Statistics (ABS) reported in May 2017 that the civilian population in Australia over 15 years of age was 20.8 million.Of this population of 20.8 million Australians, 13.5 million were employed and 0.7 million were unemployed.Calculate Australia’s labor force and the number of people in the civilian population who were not in…
ces For each of the following years, determine the real interest rate. Find the difference between this rate and the desired real interest rate and explain how any difference affects borrowers and lenders. Write out percentage rates as whole numbers e.g. 5%. a. In year 1, the nominal interest rate is 7%, the inflation premium on loans is 2%, and actual rate of inflation is 3%. The real interest rate is [ %, the desired real interest is b. In year 2, the nominal interest rate is 8%, the inflation premium The real interest rate is%, the desired real interest is %, borrowers are [(Click to select) and lenders are [(Click to select) is 3%, and the actual rate of inflation is 1%. ]%, borrowers are [(Click to select) and lenders are [(Click to select) is 1%. c. In year 3, the nominal interest rate is 6%, the inflation premium is 1%, and the actual rate of inflation The real interest rate is %, the desired real interest is %, borrowers are (Click to select) and lenders are (Click to select)