You Lend $5,000 to a Friend for One Year at a Nominal

question 222

Multiple Choice

You lend $5,000 to a friend for one year at a nominal interest rate of 10%.Inflation during that year is 5%.As a result,you will receive ________ at the end of the year,but that money has a purchasing power of ________.

• A)$5,050; $5,025
• B)$5,100; $5,050
• C)$5,500; $5,250
• D)$6,000; $5,500

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Definitions:

Scale Construction

The process of developing a measurement tool that quantifies abstract concepts or variables, often involving item generation, testing, and validation.

Item Generation

The process of creating questions, prompts, or tasks for use in surveys, assessments, or tests.

Scale Construction

The process of developing a measurement tool that quantitatively assesses a particular variable or set of variables.

Linear

A relationship or progression that is straight or sequential, often referring to models where the effect of one variable on another is constant.