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-BARSIC- [3]
3 years ago
5

The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on car loans is 11% per year. If borrow

ers and lenders expect an inflation rate of 2% per year, the expected real interest rate is _____per year. Suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 2% to 6% per year. In the short run, the real interest rate on car loans will ________to 5% per year. The unanticipated change in inflation arbitrarily benefits ____________. Now consider the long-run impact of the change in money growth and inflation. According to the Fisher effect, as expectations adjust to the new, higher inflation rate, the nominal interest rate will __________ to 9% per year.
Business
1 answer:
Jobisdone [24]3 years ago
7 0

Answer:

Suppose the nominal interest rate on car loans is 11% per year. If borrowers and lenders expect an inflation rate of 2% per year, the expected real interest rate is <u>9%</u> per year. REAL INTEREST RATE = NOMINAL INTEREST RATE - INFLATION RATE

Suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 2% to 6% per year. In the short run, the real interest rate on car loans will  <u>DECREASE</u> to 5% per year.

The unanticipated change in inflation arbitrarily benefits <u>BORROWERS (AND HURT LENDERS)</u>.

Now consider the long-run impact of the change in money growth and inflation. According to the Fisher effect, as expectations adjust to the new, higher inflation rate, the nominal interest rate will <u>INCREASE TO 15% SO THE REAL INTEREST RATE IS EQUAL</u> to 9% per year.

Explanation:

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saveliy_v [14]

Answer:

Pricing

Explanation:

4 ingredients of marketing mix are Pricing, Product, Place and Promotion(the 4Ps).

Pricing-  is for determining the value that is put on a product including rebates. Deciding the correct intrinsic value of a product puts a lot of factors into consideration like the target market, the consumer willingness to pay, whether it is sufficient enough for the company to make a profit out of it.

Product - answers the <em>what</em>; the actually good or service being offered for sale.

Place- answers the <em>where; </em>the location of product so customers can buy it.

Promotion- any activities to inform the target market that the product exist, how to use it etc. this includes advertisement, word of mouth among others.

6 0
4 years ago
At what rate per cent per annum will 4000 yield an interest of 410 in 2 years?​
andrey2020 [161]

Answer:

5%

Explanation:

The applicable formula is A = P( 1 + r) ^ n

where A= amount: P is the principal, r, interest rate, n time

In this case,

A = principal + interest = Rs 410 { Rs 4000 + Rs410}

P= Rs 4000

r= ?

n= 2

r is?

4410 = 4000(1 + r) ^2

(1 + i)^ 2 = 4410/4000

(1 + i)^ 2 = 1.1025

1 + i = √1.1025

1 + i = 1.05

i = 1.05 - 1

i = 0.05

0.05 × 100 = 5%

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TRUE. In the early 1930s, as the nation slid toward the depths of depression, the future of organized labor seemed bleak. ... The tremendous gains labor unions experienced in the 1930s resulted, in part, from the pro-union stance of the Roosevelt administration and from legislation enacted by Congress during the early New Deal.
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Answer:

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Explanation:

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Answer:

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