Quizzol

QUESTION:

Under which of the following conditions would you prefer to be the lender?

a. The nominal rate of interest is 5 percent and the inflation rate is 1 percent.

b. The nominal rate of interest is 12 percent and the inflation rate is 9 percent.

c. The nominal rate of interest is 15 percent and the inflation rate is 14 percent.

d. The nominal rate of interest is 20 percent and the inflation rate is 25 percent.

ANSWER:

a. The nominal rate of interest is 5 percent and the inflation rate is 1 percent.

Posted by Cleveland on September 9, 2024