Tamika is lending Juan $1,000 for one year. The CPI is 1.60 at the time theloan is made, and they both expect it to be 1.68 in one year. If Tamika andJuan agree that Tamika should earn a 3 percent real return for the year,the nominal interest rate on this loan should bepercent.

The interest rate is the fee of borrowing cash or the go back on investment expressed as a percent…

Tamika is lending Juan $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they both expect it to be 1.68 in one year. If Juan agree that Tamika should earn a 3 percent real return the nominal interest rate on this loan should be and year, for the Tamika percent.

Tamika is lending Juan $1,000 for one year. The CPI is 1.60 at the time the loan is made, and they both expect it to be 1.68 in one year. If Juan agree that Tamika should earn a 3 percent real return the nominal interest rate on this loan should be and year, for the Tamika percent.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 18P

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Question

Tamika is lending Juan $1,000 for one year. The CPI is 1.60 at the time the
loan is made, and they both expect it to be 1.68 in one year. If Tamika and
Juan agree that Tamika should earn a 3 percent real return for the year,
the nominal interest rate on this loan should be
percent.

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