If a Lender Charged a 4 Percent Nominal Interest Rate

question 37

Multiple Choice

If a lender charged a 4 percent nominal interest rate and the expected inflation rate is 1 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 1 percent?

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

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Definitions:

Management-By-Objectives

Management-By-Objectives is a performance management approach where employees and managers define and agree on specific objectives to be achieved within a timeframe.

Performance Appraisal

A systematic evaluation process by which an employee's job performance is assessed, often influencing promotions, pay raises, and development.

Factors

elements or components that contribute to a particular outcome or situation.

Employee's Decision

The choices made by an employee regarding their job and career path, including job acceptance, resignation, or retirement.