You Borrow $10,000 from a Bank for One Year at a Nominal

question 204

Multiple Choice

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?

• A)15%
• B)5%
• C)-1.1%
• D)-6.1%

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Definitions:

Intersectionality

A framework for understanding how various aspects of a person's social and political identities (race, gender, class, sexuality, etc.) combine to create different modes of discrimination and privilege.

Pan-Ethnic Groups

Broad categories that group together smaller ethnic groups based on common cultural, geographic, or racial traits.

Institutional Racism

A form of racism embedded in the laws, policies, and practices of social and governmental institutions, resulting in discrimination against certain racial groups.

Structural Racism

A form of racism embedded in the legal system, political mechanisms, and social structures of a society, disproportionately disadvantaging racial minorities.