Let: (1)Pt Be the Price of One Unit of a Market

question 59

Multiple Choice

Let: (1) Pt be the price of one unit of a market basket of goods it be the one-year nominal interest rate.Suppose an individual borrows the equivalent of one unit of a composite commodity today.Given this information,which of the following expressions represents (i.e.,is equal to) the amount of the composite commodity one must repay in one year?

• A) (1 + it) (Pet+1) / (Pt)
• B) (1 + πet+1) / (1 + it)
• C){(1 + πet+1) / (1 + it)} - 1
• D){(1 + it) (Pt) / (Pet+1)} - 1
• E)none of the above

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Definitions:

Protestant Ethic

A concept proposed by sociologist Max Weber, suggesting that Protestant religious values, especially those of Calvinism, contributed to the development and growth of capitalism.

Max Weber's Analysis

The examination and interpretation of society and social relationships based on the theories and methodologies developed by the sociologist Max Weber.

Routinization of Charisma

The process by which charismatic authority is institutionalized and embedded within the structures of an organization or society.

Weber's Term

Refers to concepts or terminologies introduced by sociologist Max Weber, such as “bureaucracy,” “social action,” or “Charismatic authority.”