-The Effective Annual Interest Rate on a Loan in Which

question 44

Multiple Choice

-The effective annual interest rate on a loan in which a company borrows $1,000,000 for one year at 8 percent and requires a compensating balance of 10 percent is:

• A)79.5%
• B)8.5%
• C)8.9%
• D)7.918%
• E)none of the above

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Definitions:

Keynes's Criticism

John Maynard Keynes's opposition to certain economic theories or policies, often emphasizing the importance of demand and government intervention in mitigating downturns.

Classical Theory

An economic theory emphasizing that markets function best without government interference and that economic problems are self-correcting.

Wage Rates

The amount of compensation workers receive per unit of time worked, often expressed hourly or annually.

Intermediate Range

Pertains to a spectrum or level that lies between the shortest and longest extremes, often used in the context of distances, durations, or magnitudes.