Business, 03.03.2020 20:46 malikbryant2002
The Fisher effect and the cost of unexpected inflation 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 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.
Answers: 3
Business, 22.06.2019 05:50
Match each of the terms below with an example that fits the term. a. fungibility the production of gasoline b. inelasticity the switch from coffee to tea c. non-excludability the provision of national defense d. substitution the demand for cigarettes
Answers: 2
Business, 22.06.2019 09:00
You speak to a business owner that is taking in almost $2000 in revenue each month. the owner still says that they are having trouble keeping the doors open. how can that be possible? use the terms of revenue, expenses and profit/loss in your answer
Answers: 3
Business, 22.06.2019 10:40
Parks corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. the investment would provide cash inflows of $2,000 per year for six years. the working capital would be released for use elsewhere when the project is completed. if the company's discount rate is 10%, the investment's net present value is closest to (ignore income taxes) ?
Answers: 1
The Fisher effect and the cost of unexpected inflation Suppose the nominal interest rate on car loan...
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