Why should the rate at which you earn, interest should be higher than the inflation rate?

Q: Suppose the annual nominal interest rate is 7 percent and the inflation rate is 7 percent. If you…

A: This can be defined as a concept that shows a given nominal amount refers to how many units of…

Q: Q. Discuss the costs and benefits of inflation?

A: Inflation is the rate at which a currency's value falls and, as a result, the general level of costs…

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: hat are the causes and effects of inflation

A: Inflation is the increase in the general price level. A decrease in the general price level refers…

Q: What happens when the situation of inflationary economy arises?

A: Inflation is the increase in price level which increases the cost of living and decreases the…

Q: You open a savings account with a 0.5% per year nominal interest rate, and the economy experiences…

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Q: Find the value of inflation if real interest rate is 0 and nominal interest rate is 4.6%

A: We are given that:- Real interest rate = 0% Nominal interest rate = 4.6% Note- Real interest rate is…

Q: What is the difference between Market and Inflation-Free Interest Rates?

A: Market and inflation free interest rate are entirely different concepts. Market is the place that…

Q: Suppose you borrow $100 from a bank at 5 percent interest for 1 year and the inflation rate that…

A: If $100 is borrowed from the bank at 5% interest rate for 1 year, then after an year, (100+ 5% of…

Q: What is the Nominal interest?

A: The percentage of the principal amount that charged by a lender to a borrower is referred to as…

Q: What is the nominal interest rate?

A: The nominal interest rate is an interest rate which does not take inflation into the account and is…

Q: What is inflation and how does it impact individuals

A: Inflation refers  to the general increase in price level with decease in the purchasing power of a…

Q: Suppose you take out a loan for school this year for $4500. The bank expects that the rate of…

A: Inflation is the rate at which the value of a currency is falling and, consequently, the general…

Q: economic inflation

A: The economic inflation is a situation when price rises at different rates during a duration. The…

Q: What are 3 ways the government can lower inflation?

A: Inflation is frequently characterised as a broad metric, such as an increase in general prices or…

Q: Calculate inflation if real interest rate is 12% and nominal interest rate is 15%

A: The Given information is as follows:- Real interest rate = 12% Nominal interest rate = 15% Inflation…

Q: Which government action is designed to lower inflation?

A: Inflation refers to a rise in the prices of goods and services in an economy. This means a higher…

Q: In order to make up for the future loss in purchasing power. the rate at which you earn interest…

A: Inflation is an economic phenomenon that refers to the persistent increase in the prices of goods…