If the Borrower and Lender Agree to a Loan at 8

question 64

Multiple Choice

If the borrower and lender agree to a loan at 8% when the inflation rate is 3%, then 8% is the ______ interest rate and 5% is the ______ interest rate.

• A)real; nominal
• B)nominal; real
• C)relative; nominal
• D)real; relative

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Definitions:

Cognition

The mental processes involved in gaining knowledge and comprehension, including aspects like thinking, knowing, remembering, judging, and problem-solving.

Mental Processes

These refer to the internal cognitive activities that include thinking, perceiving, problem-solving, and information processing.

Cognitive Activity

Cognitive activity involves processes related to thinking, such as problem-solving, memory, decision-making, and perception, indicative of the mental action or process of acquiring knowledge and understanding.

Syntax

In linguistics, the set of rules that dictate the structure of sentences in a language.