If the Real Return on Government Bonds Is 3 Percent

question 56

Multiple Choice

If the real return on government bonds is 3 percent and the expected rate of inflation is 4 percent, then the cost of holding money is ______ percent.

• A) 1
• B) 3
• C) 4
• D) 7

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Definitions:

Entrepreneurship

The act of creating, developing, and managing a new business venture in order to profit while bearing any of its risks.

Idea Generation

The act of generating, expanding, and conveying innovative thoughts.

Opportunity Recognition

The ability to identify a potentially profitable or beneficial business idea, market niche, product, or service before others.

Entrepreneurs

Individuals who start, design, and manage a new business venture, often taking on greater than normal financial risks.