If You Lend a Dollar for a Year and at the End

question 87

Multiple Choice

If you lend a dollar for a year and at the end of the year the price level has risen by 10 percent

• A) the purchasing power of your loan has risen over the year regardless of the interest rate at which you lent it.
• B) the purchasing power of your loan has remained constant over the year regardless of the interest rate at which you lent it.
• C) you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan.
• D) you must have earned a nominal interest rate of 5 percent to maintain the purchasing power of your loan.

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Definitions:

Indirect Aggression

A form of aggression where harm is caused to another person through manipulation or gossip rather than physically.

Spreading Gossip

The act of sharing information, often of a personal or private nature, about others without their consent, typically resulting in negative or harmful effects.

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The capacity to use language effectively and understand, interpret, and express oneself through written and spoken words.

Jacqueline Eccles

A psychologist known for her research in educational psychology, especially on adolescents' academic motivation and achievement.