In the Country of Hyrkania,the CPI in 2000 Was 120

question 2

Multiple Choice

In the country of Hyrkania,the CPI in 2000 was 120 and the CPI in 2001 was 132.Jake,a resident of Hyrkania,borrowed money in 2000 and repaid the loan in 2001.If the nominal interest rate on the loan was 12 percent,then the real interest rate was

• A)12 percent.
• B)10 percent.
• C)2 percent.
• D)impossible to determine without knowing the base year for the CPI.

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Definitions:

Consumer Surplus

The distinction between what customers can and are ready to pay for a product or service and the amount they end up paying.

Online Classes

Courses or educational programs delivered over the internet, allowing students to learn remotely.

Consumer Surplus

The discrepancy between what consumers are prepared and capable of paying for a product or service compared to what they end up spending.

Willingness to Pay

The maximum amount a buyer is prepared to spend on a good or service, reflecting the value they derive from it.