People anticipate the inflation rate to be 8%. banks are making loans at a 12% interest rate. therefore, a. the real rate of interest is 4% and the nominal rate is 12%. b. the real rate of interest is 12% and the nominal rate is 4%. c. the real rate of interest is 8% and the nominal rate is -4%. d. the real rate of interest is 12% and the nominal rate is 8%.

The correct answer is A

Explanation:

Inflation is the persistent rise in the general price level of goods and services in an economy over a period of time.

Inflation in an economy could either be ordinary, persistent, Demand pull, Cost push, creeping, Galloping, or Hyper inflation. It can be caused by increase in wages and salaries, when demand is greater than supply, Excessive deficit financing or rapidly increasing government expenditure or budget.

The effect of inflation on the economy of a nation can be enormous. It includes Transfer of real earning from creditors to debtors, discouraged savings, loss of confidence in country's currency,fall in the standard of living.

The inflation in an economy can be controlled by monetary policy, such open market operation, Bank rate, cash reserve ratio, it can also be controlled by fiscal policy such as revenue and expenditure. It can also be measured by using method such as consumer price index, wholesale price index, GDP deflator/GDP index.

clearcutting reproduces a new even-aged stand by completely removing the mature stand.

clearcutting as a silvicultural treatment has several characteristics:

it causes a sudden environmental change

it removes the seed source from the regeneration area

the configuration of the clearcut may affect seed dispersal

it begins a new rotation

it will eliminate some pests that require forest cover

overall, it temporarily removes the forest cover, transforming the forest community and environment.

clearcutting followed by artificial (seeded or planted) regeneration has several advantages:

we can avoid delay in restocking the site

we can introduce a selected species, seed source, and genotype

we can control arrangement and spacing

we can achieve uniformity in the new stand

we can overcome the problems associated with securing sufficient natural regeneration.

the shelterwood method involves the removal of most of the mature stand at the end of the rotation, but a portion of the mature stand is left standing.   the shelterwood method serves three basic purposes:

to prepare the stand for production of abundant seed

to modify the environment in a way that promotes germination and survival of the selected species

to build up the amount and size of advance regeneration to ensure the prompt restocking of the new stand following overstory removal.

the shelterwood method involves a sequence of 3 cuttings:

preparatory cuttings: make the seed trees more vigorous and set the stage for regeneration. see our thinning page for more information.

establishment/seed cuttings: open up enough vacant growing space to allow establishment of the new regeneration.

removal cuttings: uncover the new crop to allow it to fill the growing space.

the residual trees in the shelterwood must:

be sturdy and windfirm

be able to survive exposure

flower and reproduce seed

be the best trees of the mature stand

keep in mind that the shelter trees must not occupy the entire site.   a void must be created in order to make room for the new regeneration. the amount of shelter to leave will depend on the following factors:

species characteristics (seeding and shelter requirements)

the number of cuttings in the cutting sequence (1, 2, or 3)

landowner objectives

the size of the area to be regenerated

the final removal harvest level required to be profitable

the shelter must be removed before it impedes the growth of the new stand or threatens its survival.