iversity-ECON 112 Macroeconomics-Summer18-GUPTA Activities and Due Dates Measuri

Question

iversity-ECON 112 Macroeconomics-Summer18-GUPTA Activities and Due Dates Measuring the Cost of Liv 6/11/2018 11:55 PM 67.6/100 Print ?Calculator Gradeb Question 11 of 14 IncorrectIncorrect Map h Sapling Learning Determine if each statement is True or False. Every statement belongs in a bin. True False Loan contracts specify the nominal interest rate. In 1980, nominal interest rates increased while real interest rates decreased. Borrowers lose when inflation is higher than expected. Lenders gain when inflation Loan contracts specify the real interest rate. is lower than expected Previous &Give; Up& View SolutionCheck Anewer Next l Exit Hint about us careersprivacy policy terms of use contact us

Explanation / Answer

true

loan contracts specify the nominal interest rate.( The nominal interest rate is the rate that appears on the loan agreements, the stated rate that does not account in any way for inflation.)

lenders gain when inflation is lower than expected (Since the real interest rate is higher than was expected, the lender gains)

1980 nominal interest rates increased (by an increase in inflation ) while real interest rates decreased

false

borrowers lose when inflation is higher than expected ( real interest rate is lower than expected hence borrower gains)

loan contract specify real interest rate ( they specify nominal interest rate )

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.