Suppose You Borrow $2000 for One Year and at the End

question 34

Multiple Choice

Suppose you borrow $2000 for one year and at the end of the year you repay the $2000 plus $110 of interest.The expected inflation rate was 2.2% at the time you took out the loan,but the actual inflation rate turned out to be 3.3%.What was the actual real interest rate you paid?

• A) 2.2%
• B) 3.3%
• C) 5.5%
• D) 8.8%

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Definitions:

Closed Shop

A form of labor agreement in which an employer agrees to hire only members of a labor union.

Agency Shop

A workplace where non-union employees must pay a fee to the union for its services in negotiation without becoming full members.

Check-off

A procedure where an employer deducts union dues or other fees from an employee's wages and transfers them directly to the union or relevant body.

Maintenance of Membership

A labor union rule that requires workers to maintain union membership as a condition of employment.