Interest Rates quiz

More questions about Interest Rates

These visible examples show the question style. LearnClash turns the full topic into ranked duels and spaced repetition.

1. 1 Easy

   Roughly what real return does 1% interest give at 3% inflation?

   Answer: -2%

   Why: By the Fisher equation, the real return is roughly the interest rate minus inflation, so savings can earn interest yet still lose buying power.

2. 2 Medium

   What did bond owners once cut off to collect interest?

   Answer: Coupons

   Why: That is why a bond's interest payment is still called its coupon, even though most bonds are now electronic.

3. 3 Hard

   What rate did Britain announce but never apply on Black Wednesday?

   Answer: 15%

   Why: That same evening, Britain announced it was leaving the European Exchange Rate Mechanism.

4. 4 Easy

   What do central banks call creating money to buy bonds?

   Answer: Quantitative easing

   Why: The Fed's balance sheet swelled from about $870 billion in 2007 to nearly $9 trillion by 2022, mostly through quantitative easing.

5. 5 Medium

   By what percent does a rate rise when it goes from 2% to 3%?

   Answer: 50%

   Why: The gap is one percentage point, but measured against the old 2% rate the new one is half as big again.

6. 6 Hard

   How low had the Bank of England's rate ever gone before 2009?

   Answer: 2%

   Why: That floor held from 1694 until January 2009, when the Bank cut its rate to 1.5%.