Suppose That Last Year You Borrowed $100 at 5 Percent

question 15

Multiple Choice

Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation rate was 10 percent last year, your purchase of the shoes would:

• A) make you an inflation winner as you saved $5 on the shoes.
• B) make you an inflation loser as you paid $5 more than you should have for the shoes.
• C) not be affected at all by the inflation rate.
• D) be taxed according to COLA adjustments.

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Definitions:

Creativity

The ability to generate new ideas, solutions, or innovations that are both novel and useful.

Extrinsic Rewards

Benefits provided from an external source as recognition for an individual's performance or behavior, often tangible like money or awards.

Creative Behaviour

The act of generating new and useful ideas, processes, or solutions.

Autonomy

The degree to which individuals or units have the freedom to make decisions and take actions independently.