a higher monthly payment occurs when ____ * 1 point\nthe term is shorter\nthe term is longer\n\na higher…

a higher monthly payment occurs when ____ * 1 point\nthe term is shorter\nthe term is longer\n\na higher monthly payment occurs when ____ * 1 point\nthe interest rate is lower\nthe interest ate is longer\n\nthe ___ interest rate reflects the interest before inflation is taken into account * 1 point\nreal\nnominal\n\nthe ________ interest rate added to the rate of inflation equals the ________ interest rate * 1 point\nnominal, real\nreal, nominal

a higher monthly payment occurs when ____ * 1 point\nthe term is shorter\nthe term is longer\n\na higher monthly payment occurs when ____ * 1 point\nthe interest rate is lower\nthe interest ate is longer\n\nthe ___ interest rate reflects the interest before inflation is taken into account * 1 point\nreal\nnominal\n\nthe ________ interest rate added to the rate of inflation equals the ________ interest rate * 1 point\nnominal, real\nreal, nominal

Answer

Brief Explanations:

  1. For loan - payments, when the term is shorter, the principal and interest are spread over fewer periods, resulting in higher monthly payments. When the term is longer, payments are spread over more periods and are lower.
  2. A higher interest rate means more interest is charged each period, leading to higher monthly payments. A lower interest rate results in lower monthly payments.
  3. The nominal interest rate is the interest rate before inflation is considered. The real interest rate takes inflation into account.
  4. The formula is $i = r+\pi$, where $i$ is the nominal interest rate, $r$ is the real interest rate, and $\pi$ is the inflation rate. So the real interest rate added to the rate of inflation equals the nominal interest rate.

Answer:

  1. the term is shorter
  2. (There is a mis - typing in the second option, but assuming it means higher interest rate) a higher interest rate would lead to a higher monthly payment. If we correct the options, the answer is neither of the given ones as written, but if we assume the second option should be "the interest rate is higher", then that would be correct.
  3. nominal
  4. real, nominal