Business
Business, 22.07.2019 04:40, frostylui

If you want to earn a real interest rate of 3% on money you lend, and you expect that inflation will be 2%, what nominal rate of interest will you charge?

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Business, 24.06.2019 20:10, calvinclifton
Rajiv receives a portion of his income from his holdings of interest-bearing u.s. government bonds. the bonds offer a real interest rate of 2.5% per year. the nominal interest rate on the bonds adjusts automatically to account for the inflation rate. the government taxes nominal interest income at a rate of 10%. the following table shows two scenarios: a low-inflation scenario and a high-inflation scenariogiven the real interest rate of 2.5% per year, find the nominal interest rate on rajiv's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario.inflation rate real interest rate nominal interest rate after-tax nominal interest rate after-tax real interest rate(percent) (percent) (percent) (percent) (percent)2.0 2.5 7.5 2.5 compared with higher inflation rates, a lower inflation rate will the after-tax real interest rate when the government taxes nominal interest income. this tends saving, the quantity of investment in the economy the economy's long-run growth rate.
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Business, 15.07.2019 00:00, caromaybelline71
The 1970s saw a period of high inflation in many industrialized countries including the united states. due to the increase in the rate of inflation, lenders, including credit card companies, revised their nominal interest rates upward. how is the rate of inflation related to the nominal interest rate that credit card companies charge, and why would lenders need to increase the nominal interest rate when the inflation rate increases? a. the nominal rate of interest is the real rate of interest plus the rate of inflation; lenders need to raise the nominal rate when inflation increases to stabilize credit market activity. b. the nominal rate of interest is the real rate of interest plus the rate of inflation; lenders need to raise the nominal rate when inflation increases to maintain their desired real return. c. the nominal rate of interest and the inflation rate are inversely related; lenders need to raise the nominal rate when inflation increases to satisfy government regulations on lending practices. d. the nominal rate of interest is the real rate of interest less the rate of inflation; lenders need to raise the nomin
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Business, 19.09.2019 18:30, mallardmya2006
Suppose that the nominal interest rate is 6% and the expected inflation rate is 2%. if banks and the public expect the inflation rate to increase to 4% a banks will keep their nominal interest rates at 6% b banks will increase their nominal interest rates c banks will lend more money to borrowers d the real interest rate should increase also
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Business, 25.10.2019 18:43, gdeorsey
Suppose the real interest rate is 4% and expected inflation is 1% . what is the nominal interest rate? nominal interest rate: % all else equal, if inflation decreases by 0.5% what will happen to the nominal interest rate? the real interest rate will increase by 0.5% . the nominal interest rate will decrease by 0.5% . the real interest rate will decrease by 0.5% . the nominal interest rate will increase by 0.5% . what do economists call the relationship between the nominal interest rate and the inflation rate? shoeleather costs fisher effect taylor rule leontief paradox
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