Assuming Inflation Is Positive,the Real Interest Rate

question 39

Multiple Choice

Assuming inflation is positive,the real interest rate

• A) must always be larger than the nominal interest rate.
• B) must always be smaller than the nominal interest rate.
• C) could be larger or smaller than the nominal interest rate,depending on the rate of inflation.
• D) would normally be larger than the nominal interest rate.
• E) increases exactly as fast as inflation.

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