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Ceteris paribus, the nominal rate of interest will increase when the a.real rate of inter

Ceteris paribus, the nominal rate of interest will increase when the

a.real rate of interest falls.

b.expected rate of inflation increases.

c.expected rate of inflation falls.

d.a and b

e.a and c

 

 

 

84.If the nominal rate of interest is 7 percent and the expected rate of inflation is 6 percent, then the real rate of interest is

a.6 percent.

b.12 percent.

c.1 percent.

d.4 percent.

 

 

 

85.If X is the actual amount of income or receipts and i is the interest rate (in decimals) that could be earned on alternative uses of money that face the same risk, the present value of X one year from now is computed by

a.X/(1-i).

b.X/(1+i).

c.i/(1+X).

d.(X)(1 + i).

e.(i)(1 + X).

 

 

 

86.If X is the actual amount of income or receipts and i is the interest rate (in decimals) that could be earned on alternative uses of money that face the same risk, the present value of X in t years from now is computed by

a.(it)(1 + X).

b.(Xt)(1 + i).

c.i/(1 + X)t.

d.X/(1 + i)t.

e.X/(1 - i).

 

 

 

87.The demand for loanable funds curve is

a.upward sloping.

b.downward sloping.

c.perfectly elastic.

d.perfectly inelastic.

 

 

 

88.The supply of loanable funds curve is

a.upward sloping.

b.downward sloping.

c.perfectly elastic.

d.perfectly inelastic.

 

 

 

89.The equilibrium interest rate is determined

a.by the demand for loanable funds.

b.by the supply of loanable funds.

c.by the demand for and supply of loanable funds.

d.independently of the demand for and supply of loanable funds.

 

 

 

90.Interest rates differ because of differences in

a.risk.

b.the term of the loan.

c.the cost of making the loan.

d.a and b

e.all of the above

 

 

 

91.The interest rate on a loan will be lower,

a.the shorter the term of the loan.

b.the less risk associated with the loan.

c.the lower the processing costs of the loan.

d.the lower the administrative costs of the loan.

e.all of the above

 

 

 

92.The interest rate will be higher,

a.the longer the term of the loan.

b.the less risk associated with the loan.

c.the lower the processing costs of the loan.

d.the lower the administrative costs of the loan.

e.none of the above

 

 

Dec 09 2019 Read more Less More

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