If You Want to Earn a Real Interest Rate of 3

question 234

Multiple Choice

If you want to earn a real interest rate of 3% on money you lend and you expect that inflation will be 2%,what nominal rate of interest will you charge?

• A)1%
• B)5%
• C)6%
• D)9%

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Definitions:

Vendor Payment

The process of compensating suppliers and service providers for goods delivered or services rendered, often as part of the procurement process in businesses and government agencies.

Project Grant

Financial support given by a government or organization for a specific project with defined objectives and outcomes.

Special Taxes

Taxes imposed for specific purposes, often to fund particular government projects or services.

Specific Programs

Specific programs denote particular initiatives or schemes designed to achieve certain goals within a broader policy or organizational framework.