If the Bank Returns $1,060 on the $1,000 Deposited for a Year

question 96

Multiple Choice

If the bank returns $1,060 on the $1,000 deposited for a year during which inflation was 4 percent,
The real interest rate is

• A)10 percent.
• B)2 percent.
• C)6 percent.
• D)-2 percent.
• E)16 percent.

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Definitions:

Observable

Capable of being seen or noticed through direct observation.

Motivating Employees

The process of encouraging and inspiring workers to perform their tasks efficiently and effectively.

Expectancy Model

A theory that explains the process individuals use to evaluate the likelihood that their efforts will lead to the desired outcome based on their expectations and the attractiveness of that outcome.

Expectancy Model

A psychological theory proposing that an individual's motivation is related to their expectation of achieving a desired outcome and the value they place on that outcome.