What happens to the market demand for assets

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Problem 1: The nominal interest rate is 3.5% and the expected inflation rate is 3.0%. What is the real interest rate?

A. 0.5%
B. 6.5%
C. -6.5%
D. -0.5%

Problem 2: Suppose equity and real estate values increase so that families with investments in stocks or homes are wealthier. What happens to the market demand for assets?

A. Demand for assets shifts rightward
B. Demand for assets shift leftward
C. Demand for assets does not change

Reference no: EM132985881

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