Imagine That You Borrow $5,000 for One Year and at the End

question 232

Multiple Choice

Imagine that you borrow $5,000 for one year and at the end of the year you repay the $5,000 plus $600 of interest.If the inflation rate was 4%, what was the real interest rate you paid?

• A)16 percent
• B)12 percent
• C)8 percent
• D)6 percent
• E)3 percent

Understand the impact of economic growth on job opportunities, wages, and standard of living.

Differentiate between the economic systems (socialism, communism, market economies) and their characteristics.

Understand the business cycle phases, including recession and recovery, and their impact on employment and consumer behavior.

Understand how restrictive monetary policy affects the money supply and inflation.

---

Definitions:

Solution

The value or set of values that satisfies a given mathematical equation or inequality.

Inequality

A mathematical sentence indicating that two expressions are not equal, using symbols such as <, >, ≤, or ≥.

Solve

The process of finding the value(s) of variable(s) that satisfy an equation, inequality, or system of equations.