If the Inflation Rate Falls and Nominal Interest Rates Are

question 51

Multiple Choice

If the inflation rate falls and nominal interest rates are unchanged,

• A) inflation will fall.
• B) inflation will continue at the same rate.
• C) real interest rates rise.
• D) real interest rates are unaffected.
• E) real interest rates fall.

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Definitions:

Permutation Test

A nonparametric statistical test method used to determine if two or more samples come from the same distribution.

P-value

A statistical measure indicating the probability of observing test results at least as extreme as those actually observed, assuming that the null hypothesis is true.

Standard Deviation

A measure that indicates the amount of variation or dispersion of a set of values from the mean (average) of that set.

Resamples

The process of taking repeated samples from observed data, often with replacement, to perform statistical inference.