7. Suppose you have can invest in a project in Country A or Country B. The CPI in both countries is 100 in 2021 (base year). In 2022, the CPI in Country A will be 105, and the CPI in Country B will be- 110. Which of the following projects should you invest in? CA-Nuth, til= (a) Country A Project 1 gives a nominal interest rate of 13% (b) Country B Project 1 gives a nominal interest rate of 18%. (c) Country A Project 2 gives a real interest rate of 7%. (d) Country B Project 2 gives a real interest rate of 9%. CB

7. Suppose you have can invest in a project in Country A or Country B. The CPI in both countries is 100 in 2021 (base year). In 2022, the CPI in Country A will be 105, and the CPI in Country B will be- 110. Which of the following projects should you invest in? CA-Nuth, til= (a) Country A Project 1 gives a nominal interest rate of 13% (b) Country B Project 1 gives a nominal interest rate of 18%. (c) Country A Project 2 gives a real interest rate of 7%. (d) Country B Project 2 gives a real interest rate of 9%. CB

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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