If the Nominal Interest Rate Exceeds the Rate of Inflation

question 74

Multiple Choice

If the nominal interest rate exceeds the rate of inflation, the real interest rate will

• A)not be affected.
• B)rise.
• C)be greater than zero.
• D)be less than zero.
• E)fall.

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Definitions:

Van

A type of vehicle designed for transporting goods or people, characterized by its large cargo or passenger area and commonly used for commercial, logistical, or personal use.

Loss

The negative financial result from a business's operations where expenses exceed revenues.

Fully Depreciated

An asset has reached the end of its useful accounting life, and its book value is reduced to salvage or residual value.

Plant Asset

Long-term tangible assets that are used in the operation of a business and not expected to be converted to cash in the short term.