3 years ago

Can someone explain the relationship between consumer expectations and economic performance?

1 answer:

maks197457 [2]3 years ago

5 0

If a consumer believes that the price of the good will be higher in the future he is more likely to purchase the good now. If the consumer expects that her income will be higher in the future the consumer may buy the good now. In other words positive expectations about future income may encourage present consumption.

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Read 2 more answers

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:

Elanso [62]

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%

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

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