During the 1970s,Canada Experienced an Unusual Pattern of Interest Rates

question 116

Multiple Choice

During the 1970s,Canada experienced an unusual pattern of interest rates.What happened during this period?

• A)The nominal interest rate was less than the real interest rate.
• B)The inflation rate was negative,implying a real interest rate that was higher than the nominal interest rate.
• C)The inflation rate exceeded the nominal interest rate,implying a negative real interest rate.
• D)The inflation rate was negative,implying a nominal interest rate higher than the real interest rate.
• E)The nominal and real interest rates were equal to each other.

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Definitions:

Macroeconomics

Study of a nation’s overall economic issues, such as how an economy maintains and allocates resources and how a government’s policies affect the standards of living of its citizens.

Buyers' Incomes

The total earnings or revenue of purchasers, which directly impacts their purchasing power and demand for goods and services in the market.

Pure Competition

Market structure, in which large numbers of buyers and sellers exchange homogeneous products and no single participant has a significant influence on price.