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Mnenie [13.5K]
2 years ago
14

Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be low

er than they both expected. (1) True or False: The real interest rate on this loan is lower than expected. The lender (2) gains/loses from this unexpected lower inflation, and the borrower (3) gains/loses under these circumstances.
Business
2 answers:
Alla [95]2 years ago
6 0

Answer:

1) False

when the inflation is lower than expected, the real interest rate will be higher, since

real interest rate = Nominal interest rate - inflation.

2) Gains

In case of unexpected lower inflation the lender gains and the borrower loses.This is because real value of the loan increases due to lower inflation.

3) Loses

In case of unexpected lower inflation the lender gains and the borrower loses.This is because real value of the loan increases due to lower inflation.

maxonik [38]2 years ago
4 0

Answer: The real interest rates are lower than expected, the lender loses from the unexpected lower inflation and the borrower gains under these circumstances.

Explanation:

When inflation is higher than was expected, the real interest rate is lower than expected. ... Because the real interest rate is lower than was expected, the lender loses and the borrower gains. The borrower is repaying the loan with dollars that are worth less than was expected.

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7 0
2 years ago
Productivity is generally more difficult to improve in the service sector than in the manufacturing sector. True False
Dvinal [7]

Answer: True

Explanation:

Productivity is the process of measuring an organization's ability to produce a good or service. While organizations that produce goods can point to the total finished number of products as evidence. It is difficult to improve the service sector's productivity, because of the following;

1. Service industries are labor-intensive

2. Measuring and monitoring service quality are difficult

3. Most service establishments are of small size

4. Using machine technology and labor-saving devices is difficult

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3 years ago
What’s dangerous about taking out a payday loan?
vagabundo [1.1K]

Answer:

the main danger with taking out a payday loan is that you may quickly get trapped in a cycle of debt ,although altho payday loan is normally for a fairly low sum of money, such as £200, it is easy to get trapped in a cycle of taking a new loan out every month to cover the same or increased shortfall

8 0
2 years ago
Vito Co. had current assets of $9,000 and current liabilities of $6,000 at the end of the year. Net income during the year was $
Fynjy0 [20]

The current ratio for Vito Co. with respect to the period under review is 1.5

<h3>What is current ratio?</h3>

The current ratio, also known as the working capital ratio, measures the capability of a business to be able to meet its short term financial obligations.

The Current Ratio formula is

= Current Assets / Current Liabilities

= $9,000 / $6,000

= 1.5

Therefore, the current ratio for Vito Co. with respect to the period under review is 1.5

Learn more about current ratio here: https://brainly.in/question/45000916

5 0
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sesenic [268]

Tyrone is buying a cup of coffee at the corner coffee shop, which he does most days.

This is further explained below.

<h3>What is a consumer?</h3>

Generally, The process through which a company or other organization acquires the products or services it needs to meet its objectives is known as purchasing.

Even though there are various organizations that make an effort to provide standards for the buying process, individual firms' procedures might be quite different from one another.

A person or group is considered to be a consumer if they intend to order, do order, or use purchased goods, products, or services primarily for personal, social, family, household, and similar needs that are not directly related to entrepreneurial or business activities.

Consumers can be individuals or groups.

In conclusion, Tyrone is doing what he does almost every morning, which is going to the coffee shop on the corner and purchasing a cup of coffee.

Read more about consumers

brainly.com/question/13420317

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