You Borrow Some Amount of Money for Five Years at a Fixed

question 99

Multiple Choice

You borrow some amount of money for five years at a fixed rate of 4 percent.For the first three years,inflation is 3 percent,and for the last two years,deflation is 3 percent.Based on this information,your

• A) real rate of interest was larger than your nominal rate only for the last two years.
• B) real rate of interest was larger than your nominal rate only for the first three years.
• C) real rate of interest exceeded your nominal rate for the entire five years.
• D) nominal rate of interest exceeded your real rate for the entire five years.
• E) nominal rate of interest equaled your real rate for the entire five years.

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Definitions:

Intangible Factors

Intangible factors are aspects that cannot be physically touched or quantified easily, but significantly impact decision-making processes, perceptions, or value assessments.

Cross-border Negotiations

The process of negotiating agreements across national boundaries, involving parties from different countries.

Cross-cultural Negotiations

The process where parties from different cultural backgrounds engage in discussions to reach an agreement.

Cultural Norms

Shared expectations and rules that guide behavior of people within social groups or societies.