What is inflation rate and the real interest rate

Assignment Help Business Economics

Reference no: EM13996884

In the country of Wiknam, the velocity of money is constant. Real GDP grows by 3 percent per year, the money stock grows by 8 percent per year, and the nominal interest rate is 9 percent. What is

a. the growth rate of nominal GDP?

b. the inflation rate?

c. the real interest rate?

Reference no: EM13996884

Questions Cloud

Evaluate the effectiveness of the organizational structure : Evaluate the effectiveness of the organizational structure and management system design, and its ability to support the key resources and capabilities that execute the business strategy

If a bank decides to hold less equity capital : If a bank decides to hold less equity capital, then, other things held constant,

Sells skateboards at an average price : The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. What would total annual reven..

Laxity of the rules governing the creation : Some observes claim that laxity of the rules governing the creation, sale and purchase of some types of securities bear much of the guilt for the Great Recession of the early twenty-first century. Can you suggest some specific types of activity that ..

What is inflation rate and the real interest rate : In the country of Wiknam, the velocity of money is constant. Real GDP grows by 3 percent per year, the money stock grows by 8 percent per year, and the nominal interest rate is 9 percent. What is the growth rate of nominal GDP, the inflation rate, th..

Fiscal policy and monetary policy : Which of the following pairs of actions suggest that fiscal policy and monetary policy are working in the same direction?

A natural gas well is projected to produce : A natural gas well is projected to produce $200,000 in profit during its first year of operation, $190,000 the second year, $180,000 the third year, and so on, continuing this pattern. If the well is expected to produce for a total of 10 years, and t..

What change in the money supply : Suppose you are given a money supply model where r = 0.1, e = 0.2, and c = 0.4. What is the money multiplier? What change in the money supply will result from an open market sale of $400,000?

What are some sources of financing for a new business : What are some barriers a company might need to overcome when entering the global market? and What are some sources of financing for a new business? Limit your post to one source, and include some pros and cons.

User Account

All Pages