If You as a Lender Want an Increase in Purchasing

question 51

Multiple Choice

If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your

• A)real rate of interest is 13 percent.
• B)expected rate of inflation is 5 percent.
• C)expected rate of inflation is 13 percent.
• D)real rate of interest is 36 percent.

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Definitions:

Upward Flow

The movement of information or feedback from lower levels of an organization to higher management, facilitating informed decision-making.

Referent Power

A form of influence based on the attractiveness and charisma of the leader, which inspires loyalty and admiration.

Expert Power

The ability to influence others based on recognized knowledge, skills, or expertise.

Legitimate Power

Power that is recognized as rightful or official within a particular social or organizational framework.