Q
Under Which of the following conditions would you prefer to be the borrower ?
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A
A. The nominal rate of interest is 12 percent and the inflation rate is 9 percent
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B
B. The nominal rate of interest is 20 percent and the inflation rate is 25 percent
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C
C. The nominal rate of interest is 5 percent and the inflation rate is 1 percent
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D
D. The nominal rate of interest is 15 percent and the inflation rate is 14 percent
Correct Answer:
B. B. The nominal rate of interest is 20 percent and the inflation rate is 25 percent
