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Begonia Begonia
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Posts: 464
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5 years ago

Question 1.

If Homer is paid an interest rate of 2% on his savings, but the inflation rate is 12%, the real interest rate Homer earns is



▸ -12%.

▸ -10%.

▸ 2%.

▸ 14%.

Question 2.

Celia wants to make an 8% 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



▸ 3%.

▸ 5%.

▸ 8%.

▸ 13%.
Textbook 
Principles of Economics

Principles of Economics


Edition: 12th
Authors:
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macemace
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5 years ago
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