Suppose That You Borrow $5,000 from the Bank to Purchase

question 280

Multiple Choice

Suppose that you borrow $5,000 from the bank to purchase some land and you agree to pay 9 percent interest on the loan. If the loan must be repaid in 12 months and the inflation rate is 13 percent during the year, then

• A)you will repay the bank with dollars with more purchasing power than you initially borrowed.
• B)you will repay the bank with fewer dollars than the bank initially loaned you.
• C)you will repay the bank with dollars with less purchasing power than it initially loaned you.
• D)the bank will receive fewer dollars, because of inflation, than it had initially expected to receive.

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Definitions:

Brainstem

The structure in the lower part of the brain that connects the cerebrum with the spinal cord, playing a vital role in controlling autonomic functions.

Cranial Nerves

Twelve pairs of nerves that emerge directly from the brain, not through the spinal cord, and affect areas such as the head and neck.

Cerebellum

A part of the brain at the back of the skull, which regulates movement, posture, and balance.

Traumatic Head Injury

Physical trauma to the head that can lead to various levels of brain injury, ranging from minor concussions to severe brain damage.