If you borrow money at a nominal interest rate of 5 percent and the inflation rate is 10 percent, what real interest rate will you pay?
a. -5 percent
b. 0.5 percent
c. 2 percent
d. 5 percent
e. 10 percent
A
Economics
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Most of the day-to-day power in monetary policy decisions lies with
A) the President of the United States. B) the Senate Banking Committee. C) the chairman of the Board of Governors. D) large commercial banks.
Economics
Imagine that you borrow $1,000 for one year and at the end of the year you repay the $1,000 plus $100 of interest. If the inflation rate was 7%, what was the real interest rate you paid?
A) 17 percent B) 10 percent C) 7 percent D) 3 percent
Economics