If a Lender Charged a 9 Percent Nominal Interest Rate

question 68

Multiple Choice

If a lender charged a 9 percent nominal interest rate and the expected inflation rate is 4 percent,what is the difference between the real rate the lender received and the real rate the lender expected when actual inflation ended up being 2 percent?

• A) 2 percent
• B) 4 percent
• C) -4 percent
• D) 1 percent
• E) 0 percent

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Definitions:

Verbal Skills

The abilities pertaining to the use of language for communication, including speaking, listening, reading, and writing.

Spatial Control

The ability to manipulate and understand the positioning and movement of objects in space, including one's own body.

Motor Control

The ability to regulate or direct the mechanisms essential to movement, involving the coordination of muscles and limbs.

Language Skills

Abilities related to the comprehension, use, and production of spoken and written language, including grammar, vocabulary, and communication.