In which of the following situations would you prefer to be borrowing? A) The interest rate is 2 percent and the expected inflation rate is 4 percent. B) The interest rate is 4 percent and the expected inflation rate is 1 percent. C) The interest rate is 25 percent and the expected inflation rate is 5 percent. D) The interest rate is 9 percent and the expected inflation rate is 7 percent

Suppose banks require a real interest rate of 10 percent. If they expect inflation to be 2 percent, what is the nominal interest rate?   Multiple Choice   5 percent   20 percent   8 percent   12 percent

When the inflation rate is expected to increase, the real cost of borrowing               at any given interest rate; the supply of bonds _____  and the supply curve shifts to the _____.   Question 1 options:   declines; decreases; left   declines; increases; right   rises; decreases; left   rises; increases; left   rises; increases; right   declines; increases; left   rises; decreases; right   declines; decreases; right

1. Your wealthy uncle gave you $100,000 in stocks on January 1, 2002. If the value of your stocks increases at 10% a year, in how many years will you have $200,000? (use the rule of 70) 2. Your boss gave you a raise of 2% during a year in which inflation increased by 4%. IN percentage terms, what happened to your real income? 3. The nominal interest rate is 8% and the inflation rate is 6%, what is the real rate of interest? 4. If the real rate of interest is 2%, and the expected rate of inflation is 3%, then the nominal rate of interest is: