Real interest rate higher lowreal interest rate

Assignment Help Business Economics
Reference no: EM131004541

1. Given the nominal interest rate of 17?% and the expected inflation of 13?%, then the value of the real interest rate is ___ ?

2. with the real interest rate equal to 3?% and the expected inflation equal to 4?%, then the value of the nominal interest rate is___?

3. A lender prefers a (high or lower) real interest rate while a borrower prefers a (higher or lower) real interest rate higher lowreal interest rate.

Reference no: EM131004541

Questions Cloud

Approximate yield to maturity on discount bond : A U.S. Treasury bill is an example of a simple loan, coupon bond, fixed-payment loan, or discount bond? The estimated current purchasing price of a discount bond with a face value of ?$2000 and a yield to maturity of 11% is____ ? What is the approxim..
First define moral hazard and provide a specific example : First define moral hazard and provide a specific example. Then, discuss what you believe should be the government's role pertaining to this subject.
Monopoly power comes from market acceptance : Consider the statement, “Monopoly power comes from market acceptance, not from a patent, a prettier product, a slick advertising campaign, or anything else. So rather than spend your time in court, you should be out there drumming up business.” Do yo..
The market has a nash-cournot equilibrium : Two firms, each in a different country, sell homogeneous output in a third country. Government 1 subsidizes its domestic firm by s per unit. The other government intervention, the market has a Nash-Cournot equilibrium. Show that Government 1's optima..
Real interest rate higher lowreal interest rate : Given the nominal interest rate of 17?% and the expected inflation of 13?%, then the value of the real interest rate is ___ ? with the real interest rate equal to 3?% and the expected inflation equal to 4?%, then the value of the nominal interest rat..
What happens with no diminishing returns : What happens with no diminishing returns? Consider a Solow model where the production function no longer exhibits diminishing returns to capital accumulation. Draw the Solow diagram in this case. What happens to the growth rate of per capita GDP over..
Consider a onetime change in government policy : An increase in the labor force: Consider a onetime change in government policy that immediately and permanently increases the level of the labor force in an economy (such as a more generous immigration policy). In particular, suppose it rises permane..
Foreign aid exert a long-run effect on the welfare : Foreign aid: Consider a Solow economy that begins with a capital stock equal to $300 billion, and suppose its steady-state level of capital is $500 billion. Summarize what this exercise teaches you about the possible consequences of foreign aid. In t..

Reviews

Write a Review

Business Economics Questions & Answers

  How the liquidity effect has diminished over time

rises over longer periods. Another research paper verifies these results, but shows how the liquidity effect has diminished over time.

  Q1 the wage rate is pound5 and the rental rate cost of

q1. the wage rate is pound5 and the rental rate cost of capital is pound2. calculate the lowest cost method of making 4

  Both countries have an overall unemployment rate

Consider two hypothetical countries. In Country A, 20 percent of the labor force is unemployed for half the year and employed for the other half; the remaining 80 percent of the labor force is never unemployed. In Country B, 100 percent of the labor ..

  What is the long-run equilibrium price of in this market

Your weekly costs to producing q units are given by the following equation: C(q)=7+10q+3.5q2 +q3. With this technology, AC is minimized at approximately q = 1.11. What is the long-run equilibrium price of in this market, given that there are no barri..

  What is the unemployment rate

Suppose that the adult population is 152 million, the number of unemployed is 19 million and the labor force participation rate 63%. What is the unemployment rate?

  Two budget constraints and two optimal bundles

Boris budgets $40 week for his morning coffee with milk. He likes it only if it is prepared with 3 parts coffee, 2 part milk U= min {3/2M,C}. Coffee costs $2/oz, milk $1/ oz. Graph the two budget constraints and the two optimal bundles with coffee on..

  The two firms have different costs of production

Consider the iron ore production industry, and assume that there are just two producers, FM and BHP. Initially assume that both firms are identical in terms of their production costs. If the two firms can cooperate, what should they do in order to ma..

  Famous for its offerings of cheap clothing and exotic foods

The Albert Cuyp market here, famous for its offerings of cheap clothing and exotic foods, is one of the busiest in the Netherlands. But while it still attracts plenty of shoppers, customers are increasingly wary of spending their money there, said Ni..

  Aggregated demand and aggregated supply shifts

Carefully explain, using graphs, the effects of the following shocks on rst period aggregate supply and aggregate demand in our two period macro model. For each shock, what happens to rst period consumption, rst period investment, rst period employme..

  Companys objective of profit maximization

The following is a quote from a news article: "If a company makes product donations to the school- computers for instance - then the image of a. company goes up as graduate students use the company's products." Does such action consistent with a comp..

  What is the relationship between GPA and Job Selection

What is the relationship between GPA and Job Selection? (inverse or direct) What are other factors that affect job selection?

  Mean they should privatize the inefficient responsibilities

Why does the government have a bad reputation of being inefficient? And if it is inefficient in some areas and not others, does that mean they should privatize the inefficient responsibilities?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd