All categories

2 years ago

If real economic growth is 3%, the inflation rate is 5%, and the nominal interest rate is 7%, then the real rate of interest is:

Business

1 answer:

Elanso [62]2 years ago

3 0

Based on the information given the real rate of interest is:2%.

<h3>Real rate of interest</h3>

Using this formula

Real rate of interest=Nominal interest rate-Inflation rate-

Where:

Inflation rate=5%

Nominal interest rate=7%

Let plug in the formula

Real rate of interest=7%-5%

Real rate of interest=2%

Inconclusion the real rate of interest is:2%.

Learn more about real rate of interest here:brainly.com/question/25877453

You might be interested in

You are buying a new car. The price (MSRP) is $16,995. You are trading in your old car which is valued by the dealer at $5,500 (

Advocard [28]

The answer is $12,360.22(rounded)

16,995-5,500= 11,495
11,495+7%= 12,360.2151

Hope this helps!! :)

6 0

3 years ago

Graham Petroleum produces oil. On May 1, it had no work-in-process inventory. It started production of 244 million barrels of oi

lisov135 [29]

Answer:

Explanation:

Number of completed barrels = 216 + (244-216)*60%

= 233 barrels

Cost per barrel = (3245+3230)/233 = 27.8

Cost of oil shipped in pipeline = 216 * 27.8= 6003 millions

Cost of work in process ending inventory = (244-216)*60% * 27.8

= 467.04 million

4 0

3 years ago

To make a decision resulting in good corporate citizenship, a business should evaluate the decision based on:

Sergio039 [100]

Answer:

All of them

Explanation:

When making decisions, a business should evaluate:

Legal implications of each decision : do our decisions comply with all applicable laws and regulation?
Public relations impact : how will the public feel about our decision?
Safety risks for consumers and employees: does it affect the safety and well being of our employees and customers?
Financial implications: does our decision benefit our business?

7 0

3 years ago

Which of the following is not correct?a. If the inflation rate exceeds the nominal interest rate, then the purchasing power of a

lilavasa [31]

Answer:

The options which is NOT correct is C.

Purchasing power does not increase with inrease in the rate of inflation. There is an inverse relationship between inflation and purchasing power of money.

Explanation:

Inflation refers to the overall increase in prices of goods and services and the erosion of the power of the currency to purchase those goods and services. In otherwords, when inflation happens, one requires more dollar bills to purchase same unit of goods or services.

Deflation is the opposite of inflation. It refers to the decrease in the prices of goods and services and is usually accompained by an increase in the purchasing power of the currency.

Nominal interest rate simply put is the interest payable on a loan without considering processing fees, compounding interest payable and the erosion of the value of such money.

Cheers!

4 0

3 years ago

Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing departme

lakkis [162]

Answer:

Option D , $15.12

Explanation:

Weighted-average method :

Materials

Units transferred to the next department = 10,300

Ending work in process:

Materials: 1,200 units × 90% = 1080

Equivalent units of production =10,300+1080= 11,380

Materials

Cost of beginning work in process inventory= $2,700

Costs added during the period = $173,900

Total cost (a) =$173,900+$2,700 = $176,600

Equivalent units of production (b)= 11,380

Cost per equivalent unit (a) ÷ (b) = $15.51

The cost per equivalent unit for materials for the month in the first processing department is closest to $15.51

3 0

3 years ago