1- True or False: A persistent reduction, year after year, in the price of semic

Question

1- True or False: A persistent reduction, year after year, in the price of semiconductors is an example of deflation. 2-In the United States in the 1930s: A. Prices fell at the rate of 5% per year. B. Prices fell at the rate of 20% per year. C. Prices fell at the rate of 1% per year. D. Prices fell at the rate of 3% per year. E. Prices fell at the rate of 10% per year. 3- Someone with dollar bills to lend will never agree to make a loan with a nominal interest rate of less than zero because: A. It would be better to keep the dollars than to agree to such a loan. B. The lender would not get any dollars back from the borrower. C. All responses are correct. D. It is mathematically impossible for the interest rate to be negative. 4- Suppose that inflation is -3% per year and it is expected to continue at that rate in the future. If the nominal interest rate is 0% per year, then what is the real interest rate? A. 6% per year B. 3% per year C. 0% per year D. -6% per year E. -3% per year 5-Suppose that you are running a business and you need some extra space for one year. Your bank tells you that you can borrow $100,000 at 0% interest to purchase a building. You consider borrowing this amount, buying the building, using it for one year, and then selling the building to pay back the loan. Unfortunately, the economy in which you are operating is experiencing deflation at the rate of 10% per year. 5.1. After one year, you should be able to sell the building for about how much? A. $90,000 B. $100,000 C. $110,000

Explanation / Answer

I just answered it on Aplia. It is FALSE.

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