Will's expenditures on food for three consecutive years, along with other values, are presented in the following table. Expenditures on food Consumer price index Year 2 $5,800 1 $5,000 160.0 168.0 X 3 $6,600 Refer to Table 24-4. Suppose Will's Year 1 food expenditures in Year 3 dollars amounted to $5,670. Suppose also that the real interest rate in Year 3 was 3 percent. Then, in Year 3, a. the inflation rate was 8 percent and the nominal interest rate was 11 percent. b. the inflation rate was 8 percent and the nominal interest rate was 5 percent. c. the inflation rate was 9 percent and the nominal interest rate was 12 percent. d. the inflation rate was 9 percent and the nominal interest rate was 6 percent.

Will's expenditures on food for three consecutive years, along with other values, are presented in the following table. Expenditures on food Consumer price index Year 2 $5,800 1 $5,000 160.0 168.0 X 3 $6,600 Refer to Table 24-4. Suppose Will's Year 1 food expenditures in Year 3 dollars amounted to $5,670. Suppose also that the real interest rate in Year 3 was 3 percent. Then, in Year 3, a. the inflation rate was 8 percent and the nominal interest rate was 11 percent. b. the inflation rate was 8 percent and the nominal interest rate was 5 percent. c. the inflation rate was 9 percent and the nominal interest rate was 12 percent. d. the inflation rate was 9 percent and the nominal interest rate was 6 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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