If You as a Lender Want an Increase in Purchasing

question 51

Multiple Choice

If you as a lender want an increase in purchasing power of 4 percent from making a loan and you set the nominal interest rate at 9 percent, then your

• A)real rate of interest is 13 percent.
• B)expected rate of inflation is 5 percent.
• C)expected rate of inflation is 13 percent.
• D)real rate of interest is 36 percent.

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Definitions:

Theoretical Explanation

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Instrumental Case Study

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A deep understanding or realization that comes from analysis or introspection.

Issue

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