Suppose, you are lending money to your friend Julia and you want a real rate of return of 6.50%. Furthermore, you expect the inflation rate to be 4.00%. Which of the following interest rates should you charge? O A. 2.50% O B. 5.25% O C. 10.50% O D. 6.50%

Suppose, you are lending money to your friend Julia and you want a real rate of return of 6.50%. Furthermore, you expect the inflation rate to be 4.00%. Which of the following interest rates should you charge? O A. 2.50% O B. 5.25% O C. 10.50% O D. 6.50%

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter6: How Statisticians Measure Inflation

Section: Chapter Questions

Problem 6TY

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Suppose, you are lending money to your friend Julia and you want a real rate of return of 6.50%. Furthermore, you expect the inflation rate to be 4.00%.
Which of the following interest rates should you charge?
O A. 2.50%
O B. 5.25%
O C. 10.50%
O D. 6.50%
Click to select your answer.
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