Suppose You Borrow $1,000 at an Interest Rate of 12

question 78

Multiple Choice

Suppose you borrow $1,000 at an interest rate of 12 percent.If the expected real interest rate is 5 percent,then the rate of inflation over the upcoming year that would be most beneficial to you would be a rate of inflation

• A)equal to 0 percent.
• B)greater than 7 percent.
• C)equal to 7 percent.
• D)less than 7 percent.

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Definitions:

Normative

Relating to an established standard or norm; often used to describe behaviors or conditions that are considered typical within a specific society or group.

Conscientiousness

A personality trait characterized by thoroughness, diligence, and the carefulness of an individual.

Neuroticism

A personality trait characterized by tendencies toward anxiety, moodiness, worry, envy, and jealousy.

Agreeableness

A personality trait characterized by warmth, kindness, and a tendency to cooperate and seek harmony in social interactions.