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14) If the real interest rate is 7.5% and the rate of inflation is 3%, what is the nominal interest rate? A) 4.50% B) 4.57% C) 10.50% D) 10.73%

14) If the real interest rate is 7.5% and the rate of inflation is 3%, what is the nominal interest rate? A) 4.50% B) 4.57% C) 10.50% D) 10.73%

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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12:53 00 more variable, lowe B) less variable; higher C) higher; lower D) higher; higher 12) Which of the following statements about nominal interest and real interest is true? A) Nominal interest is a yearly rate and real interest is a monthly rate. Nominal interest does not adjust for inflation, whereas real interest does. C) Nominal interest is what the lender receives and real interest is what the borrower pays. B) . 46% D) Nominal interest and real interest are two ways of saying the same thing. 13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25% 14) If the real interest rate is 7.5% and the rate of inflation is 3%, what is the nominal interest rate? A) 4.50% B) 4.57% C) 10.50% D) 10.73%
Transcribed Image Text:12:53 00 more variable, lowe B) less variable; higher C) higher; lower D) higher; higher 12) Which of the following statements about nominal interest and real interest is true? A) Nominal interest is a yearly rate and real interest is a monthly rate. Nominal interest does not adjust for inflation, whereas real interest does. C) Nominal interest is what the lender receives and real interest is what the borrower pays. B) . 46% D) Nominal interest and real interest are two ways of saying the same thing. 13) If a bank is lending money at 6.25% while the government is lending money at 8.25% and the rate of inflation is 3.5%, what is the real interest being earned by the bank? A) 2.00% B) 2.66% C) 2.75% D) 6.25% 14) If the real interest rate is 7.5% and the rate of inflation is 3%, what is the nominal interest rate? A) 4.50% B) 4.57% C) 10.50% D) 10.73%
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