Unformatted text preview: unexpectedly decreases sharply. This situation will _____ you, since the real interest rate that you pay will be unexpectedly ______. (1) benefit; remain the same (2) harm; lower (3) benefit; higher (4) harm; higher. (5) not affect; higher. 4. Suppose that as a result of hyperinflation in Zaire individuals have to leave their positions at work more frequently to make trips to the bank. According to the textbook, this situation is best described as the ______ cost of inflation (1) shoeleather (2) menu (3) relative price variability (4) inflation induced tax (5) purchasing power 5. If the tax rate is 30 percent, the nominal interest rate is 9 percent and the inflation rate is 5 percent, the before tax real interest rate is _____ percent and the after tax real interest rate is (1) 4; 4 (2) 14; 1.3 (3) 4; 1.3 (4) – 4; 0 (5) 14; 4...
View
Full Document
 Spring '08
 MyoungLee
 Macroeconomics, Inflation, fixed rate mortgage, price level

Click to edit the document details