题目内容

If your parents promised to give you $1,000 in cash every Christmas for the next 30 years, what would be the real purchasing power of the final $1,000 if the average annual inflation rate over this time period is 3 percent?

A. 820
B. 640
C. 520
D. 410
E. 320

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In which time period was the average real yield on a ten-year Treasury bond the lowest?

A. 1960 to 1969
B. 1970 to 1979
C. 1980 to 1989
D. 1990 to 1999
E. 2000 to 2009

What was the average real rate of return of three-month Treasury bills during the period of 1970 to 1979?

A. 0.069
B. 0.038
C. 0.026
D. 0.012
E. -0.009

A small amount of inflation may be good for the economy since

A. it will increase nominal GDP
B. there are no menu costs associated with small price adjustments
C. real wage adjustments can be achieved without nominal pay cuts
D. real interest rates will actually increase
E. none of the above

Assume you financed a new house with a 30-year fixed rate mortgage at a 6% annual interest. rate. If you can deduct your mortgage interest payments from your taxable income and you are in the 30% tax bracket, what would be the real after-tax cost of borrowing if the average annual inflation rate is 4.2% over the 30-years period?

A. 0.042
B. 0.018
C. 0.012
D. -0.012

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