25. In which case below does a person’s returns on saving is lowest? the nominal

Question

25. In which case below does a person’s returns on saving is lowest? the nominal interest rate = 7% and inflation = 2% the nominal interest rate = 8% and inflation = 4% the nominal interest rate = 10% and inflation = 8% the nominal interest rate = 9% and inflation = 6%

27. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes.

Suppose the relevant money-demand curve is the one labeled MD1; also suppose the velocity of money is 1. If the money market is in equilibrium, then the economy’s real GDP amounts to  

Explanation / Answer

Answer :- 25.) the nominal interest rate = 10% and inflation = 8%

since real interest rate is nominal interest rate minus inflation rate therefore, real intertest rate is only 2% and also the lowest return on savings.

27.) D. 7500.

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