3. The role of inflation and real versus nominal interest rates Which of the following are likely consequences of rising inflation? Check all that apply. A misallocation of resources A redistribution of wealth away from the wealthy to those who depend on wages and salaries Savers wanting to save tess and borrowers wanting to borrow more A distorted price-signaling mechanism Suppose the real interest rate (IR) is 5% and the inflation rate is 2.5%, and then the nominal or market interest rate is Amy considers investing in the green energy industry and compares the following two options: 1. One-year bonds issued by Air Wizard, a producer of wind turbines based in the United States, that pay a norninal interest rate of 7,5% 2. One-year bonds issued by Sun Waters, a producer of solar water heaters based in Australia, that pay a nominal interest rate of 9.6% A thorough study has shown that the economic situation and prospects in the United States and Australla are very similar. Nevertheless, Aroy decides to invest in Air Wizard. Ceter's parbus, which of the follewing best explains Amy's choice? The United States has more renewable resources than Australia. In riation in the United States is more than 2.1% lower than in Australia. Real interest rate in the United States is lower than in Australia. Inflation in the United States is more than 2.1% higher than in Australia : Unemplorment rates in the United States are lower than in Australia. 3. The role of inflation and real versus nominal interest rates Which of the following are likely consequences of rising inflation? Check all that apply. A misallocation of resources A redistribution of wealth away from the wealthy to those who depend on wages and salaries Savers wanting to save tess and borrowers wanting to borrow more A distorted price-signaling mechanism Suppose the real interest rate (IR) is 5% and the inflation rate is 2.5%, and then the nominal or market interest rate is Amy considers investing in the green energy industry and compares the following two options: 1. One-year bonds issued by Air Wizard, a producer of wind turbines based in the United States, that pay a norninal interest rate of 7,5% 2. One-year bonds issued by Sun Waters, a producer of solar water heaters based in Australia, that pay a nominal interest rate of 9.6% A thorough study has shown that the economic situation and prospects in the United States and Australla are very similar. Nevertheless, Aroy decides to invest in Air Wizard. Ceter's parbus, which of the follewing best explains Amy's choice? The United States has more renewable resources than Australia. In riation in the United States is more than 2.1% lower than in Australia. Real interest rate in the United States is lower than in Australia. Inflation in the United States is more than 2.1% higher than in Australia : Unemplorment rates in the United States are lower than in Australia
