If the nominal interest rate is 2.9 percent and the rate of inflation is 0.6 percent in a given year, then what is the corresponding real rate of return?

A) 3.5 percent
B) 2.3 percent
C) -3.5 percent
D) None of the above.

B

Economics

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In a small Asian country, it is estimated that changing the level of capital from $8 million to $12 million will increase real GDP from $4 million to $6 million

What level of GDP would you expect the economy to be able to reach if spending on capital continued to rise to $16 million, assuming no technological change and no change in the hours of work? A) GDP would increase further by exactly $8 million. B) GDP would increase further by exactly $2 million. C) GDP would increase further, but by less than $2 million. D) GDP would increase further by more than $2 million

Economics

If you receive a dollar return of 6 percent on a one-year Korean bond that yields 10 percent annually, this means that between the purchase date and the time of maturity:

a. the Korean won (KRW) has depreciated 4 percent against the U.S. dollar. b. the dollar price of the Korean won (KRW) has risen by 10 percent. c. the percentage change in the dollar per Korean won exchange rate is 6 percent. d. the dollar proceeds from the Korean bond are 4 percent higher than the initial dollar investment. e. the dollar has depreciated 16 percent against the Korean won.

Economics