Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A bank lends money for a year at an interest rate of 9% and the inflation rate for that year turns out to be 5%.What

A bank lends money for a year at an interest rate of 9% and the inflation rate for that year turns out to be 5%.What is the bank's real rate of return for that year?

A.) 2%

B.) 6%

C.) 14%

D.) 4%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Microeconomics and Its Application

Authors: walter nicholson, christopher snyder

11th edition

9781111784300, 324599102, 1111784302, 978-0324599107

Students also viewed these Economics questions