EC201 chapter_7_Quiz Full

EC201 chapter_7_Quiz Full

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Unformatted text preview: ase in the nominal interest rate, holding the inflation rate constant B) an increase in both the nominal interest rate and the inflation rate by the same percentage points C) a decrease in the inflation rate, holding the nominal interest rate constant D) a decrease in both the nominal interest rate and the inflation rate by the same percentage points Answer: C Diff: 2 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 43) If Mr. is paid an interest rate of 4% on his savings, but the inflation rate is 7%, the real interest rate Mr. Garrison Garrison earns is A) 4%. B) -3%. C) -7%. D) 28%. Answer: B Diff: 1 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 44) You want 10% real return on a loan that you are planning to make, and the expected inflation rate during the period to make a of the loan is 4%. You should charge a nominal interest rate of A) 6%. B) -6%. C) 10%. D) 14%. Answer: D Diff: 2 Topic: Inflation Skill: Analytic AACSB: Analytic Skills 45) Lola make an 6% real return on a loan...
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This note was uploaded on 11/13/2013 for the course BUSINESS EC201-03 taught by Professor Auguste during the Fall '13 term at Monroe.

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