If You Lend a Dollar for a Year and at the End

question 45

Multiple Choice

If you lend a dollar for a year and at the end of the year the price level has risen by 10 percent,

• A) you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan.
• B) the purchasing power of your loan has risen over the year regardless of the interest rate at which you lent it.
• C) you must have earned a nominal interest rate of 5 percent to maintain the purchasing power of your loan.
• D) the purchasing power of your loan has remained constant over the year regardless of the interest rate at which you lent it.

Understand the concepts and differences among various social insurance and public assistance programs.

Understand the distinctions between social insurance and public assistance programs.

Comprehend the factors leading to higher-than-average poverty rates among specific populations in the U.S.

Recognize the scope and objectives of key government programs aimed at social security and poverty alleviation.

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