Raul Borrowed $1,000 from Marta for a Year and Agreed

question 112

Multiple Choice

Raul borrowed $1,000 from Marta for a year and agreed to repay her $1,050 at the end of the year.If the inflation rate was 3 percent,what is the real rate of interest Marta received?

• A)10 percent
• B)5 percent
• C)3 percent
• D)2 percent
• E)-2 percent

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Definitions:

Incentives

Rewards or stimuli that motivate individuals to perform a certain action or exhibit a desired behavior.

Satisfaction

The fulfillment or gratification of a desire, need, or appetite, or the pleasure derived from this fulfillment.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors; it is what causes us to act.

Emotion

An immediate, specific, negative or positive response to environmental events or internal thoughts.