Suppose the Inflation Rate Is 10 Per Cent and That

question 69

Multiple Choice

Suppose the inflation rate is 10 per cent and that you deposit $10 000 in the bank that yields 8 per cent nominal interest rate. Your real interest rate is:

• A) 0%.
• B) 2%.
• C) -2%.
• D) 8%.

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Definitions:

International Markets

Marketplaces beyond a company's home country borders where it can engage in trade or offer its products and services.

Competitive Advantage

A unique attribute or condition that allows an entity to outperform its competitors.

Unique Merchandise

Products that are distinctive in design, function, or appeal, setting them apart from common or standard items.

Loyal Customer Base

A group of repeat customers who consistently prefer a particular brand or product over competitors.