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FAITHBELLE FAITHBELLE
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4 years ago

Question 1.

Lola wants to make an 6% real return on a loan that she is planning to make, and the expected inflation rate during the period of the loan is 5%. She should charge an interest rate of



▸ 1%.

▸ 6%.

▸ 11%.

▸ 16%.

Question 2.

If the inflation rate is smaller than the nominal interest rate, the real interest rate is



▸ positive.

▸ negative.

▸ zero.

▸ either positive or zero.
Textbook 
Principles of Economics

Principles of Economics


Edition: 12th
Authors:
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amw87470amw87470
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