You Borrow Some Amount of Money for Five Years at a Fixed

question 129

Multiple Choice

You borrow some amount of money for five years at a fixed rate of 4%.For the first three years,inflation is 3%,and for the last two years,deflation is 3%.Based on this information:

• A) your real rate of interest was larger than your nominal rate only for the last two years.
• B) your real rate of interest was larger than your nominal rate only for the first three years.
• C) your real rate of interest exceeded your nominal rate for the entire five years.
• D) your nominal rate of interest exceeded your real rate for the entire five years.
• E) your nominal rate of interest equaled your real rate for the entire five years.

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Definitions:

Master Gland

A term often used to describe the pituitary gland due to its role in controlling several other hormone-secreting glands.

Endocrine System

A network of glands in the body that secrete hormones directly into the bloodstream to regulate various bodily functions, including growth, metabolism, and mood.

Hormones

Chemical substances produced in the body that regulate and control the activity of certain cells or organs.

Lesion

Tissue destruction. A brain lesion is a naturally or experimentally caused destruction of brain tissue.