If You Want to Earn a Real Interest Rate of 3

question 54

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%
• E)12%

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Definitions:

Episodic Memory

A type of long-term memory that involves the recollection of specific events, situations, and experiences.

Spinal Cord

A long, thin, tubular bundle of nervous tissue and support cells that extends from the brain down the length of the vertebral column.

Medulla

The medulla, often referred to as the medulla oblongata, is a section of the brainstem that controls vital bodily functions, such as breathing and heart rate.

Thalamus

A part of the brain located above the brainstem that acts as a relay station, processing and transmitting sensory information to the cerebral cortex.