What might be an unintended effect of an inflation rate ceiling? Group of answer choices The real interest rate can become negative if inflation is high enough. The real interest rate will always be very high, and this will discourage borrowing. Businesses will not know the nominal interest rate. It becomes impossible to calculate the real interest rate.

Q: What is  the difference between interest rates and inflation rates? Give an example of each.

A: Interest Rate and Inflation rate are different from each other. Inflation is the rise in the general…

Q: Describe what is the Specific inflation rate? Give an example?

A: Inflation rate: The term inflation refers to the average price rise over a certain period of time.…

Q: At the beginning of the fiscal year the labour union was able to negotiate a 1% increase in wages.…

A: At the end of the year, wages increases by 1% and inflation increases by 3%. Hence, the money wage…

Q: what are the effects and consequences of deflation?

A: Deflation is also known as negative inflation. It is a situation where the general price level of…

Q: In an economy inflation is 3% and the nominal interest rate is 3%  Calculate the real interest rate

A: The addition of inflation and real interest rate gives us the value of nominal interest rate Real…

Q: True or false? The nominal rate of interest is the difference between the real rate and the…

A: Nominal interest rate is the interest rate which is stated in loan agreement . It is the rate of…

Q: Write the formula of the general inflation rate?

A: The general inflation rate refers to an average inflation rate based on the CPI (consumer price…

Q: A fall in the amount of inflation, given a fixed nominal interest rate will cause: Group of answer…

A: Answer- Need to find- A fall in the amount of inflation, given a fixed nominal interest rate will…

Q: Suppose two parties agree that the expected inflation rate for the next year is 6 percent. Based on…

A: The ex ante real interest rate refers to the expected or anticipated real interest rate on an…

Q: The government of the United States is worried that the inflation rate is too high. What fiscal…

A: Option D To reduce the inflation rate, the government has to undertake steps to reduce the level of…

Q: The inflation rate in India was recorded at 4. 70 percent in May of 2013. Inflation Rate in India is…

A: This passage primarily discusses the state of inflation and economic policies in India around May…

Q: During periods when the inflation rate fluctuates widely, all money prices rise at the same rate,…

A: Inflation refers to the sustained rise in the general price level. The inflation reduces the…

Q: Which type of inflation is usually most pronounced during the expansionary phase of the business…

A: Expansionary phase of business cycle refers to the situation when real GDP is increasing.

Q: Let's say the inflation rate in an economy turns out to be higher than expected. Will the following…

A: Inflation is defined as the increase in price over a given period of time.  Given,  Inflation rate…

Q: Explain what is the relationship between the consumer price index and the inflation rate.

A: Inflation is referred to an increase in the general level of prices of goods and services in the…

Q: Macmillan Learning Refer to the hypothetical data in the table to answer the three questions. What…

A: Inflation refers to the persistent rise in general level of prices of major goods and services in a…

Q: If 2 million people are unemployed and 8 million people are employed, calculate the unemployment…

A: The unemployment rate is the percentage of people in the labour force who are unemployed. Measuring…

Q: If the inflation rate is 2 percent and the real interest rate is 4 percent, the nominal interest…

A: In an economy, inflation and different types of interest rate such that real and nominal interest…

Q: what happens if there is future expected inflation?

A: Understanding economic policy is critical for individuals, businesses, and governments since it has…

Q: Jim holds $50,000 in money at the beginning of the year. The annual inflation rate is 2 percent, and…

A: Inflation tax signifies a fall in purchasing power of a given amount of money due to presence of…

Q: According to the classical theory of money, inflation does not make workers poorer because wages…

A: Inflation is the overall increase in the price level in an economy during a particular period of…

Q: Suppose banks require a real interest rate of 12 percent. If they expect inflation to be 3 percent,…

A: A real interest rate is the one which is adjusted for the inflation whereas nominal interest rate…

Q: Suppose a nominal interest rate is 12%, and the expected rate of inflation is 9%. If next year the…

A: The inflation rate is a measure of  % change in the P level of goods in an economy over a specified…

Q: You are given the following information about the economy: the nominal interest rate = 10 percent,…

A: Given information: The nominal interest rate is 10% The real rate of interest is 3%