In order to calculate the real interest rate, simply:
A. add the rate of inflation to the nominal interest rate.
B. divide the nominal interest earned by the rate of inflation.
C. subtract the rate of inflation from the nominal interest rate.
D. subtract the nominal interest rate from the rate of inflation.
Answer: C
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The present value of $100 to be received in the year 2014 is
A) less than the present value of $100 to be received in 2015. B) greater than the present value of $100 to be received in 2015. C) the same as the present value of $100 to be received in 2015. D) greater than the present value of $100 to be received in 2015 if the interest rate in 2015 exceeds the interest rate in 2014; otherwise, it is less.
Briefly describe how the Bretton Woods system operated
What will be an ideal response?