When Nominal Interest Rates Are Zero, the MP Curve Has

question 90

Multiple Choice

When nominal interest rates are zero, the MP curve has a ________ slope because monetary authorities ________ lower the nominal interest rate and the real interest rate ________ as inflation rates decline.

• A) positive; cannot; falls
• B) negative; cannot; rises
• C) positive; can; falls
• D) negative; can; rises

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Definitions:

Covalent Bond

A covalent bond is a chemical bond formed when two atoms share one or more pairs of electrons, strongly binding them together in a molecule.

Polysaccharides

Large molecules composed of long chains of monosaccharide units bonded together, serving various functions such as storage and structural roles in plants and animals.

Triacylglycerols

Lipids formed by three fatty acids linked to a glycerol molecule; a main form of energy storage in animals.

Phospholipids

Lipids in which two fatty acids and a phosphorus-containing group are attached to glycerol; major components of cell membranes.