If the Nominal Interest Rate Rises

question 22

Multiple Choice

If the nominal interest rate rises,

• A) there is substantial inflation in the economy.
• B) real interest rates are declining.
• C) the opportunity cost of holding cash rises.
• D) consumers and firms are less inclined to use credit cards.
• E) inflation is declining.

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Definitions:

Matching

A principle in psychology and economics where choices are made to align or pair objects or actions based on similar attributes or preferences.

True/False

A binary response option often used in assessments, quizzes, or tests, requiring individuals to decide if a statement is accurate or not.

Flashbulb Memories

Memories for shocking, emotion-provoking events that include information about the source from which the information was acquired.

Periodic Revision

The regular updating or amendment of a document, system, or process to reflect changes or improvements.