If Inflation Was 1% and the Monetary Authorities Set the Nominal

question 63

Multiple Choice

If inflation was 1% and the monetary authorities set the nominal interest set at the zero lower bound, the real interest rate would be ________.

• A) -1%
• B) 0%
• C) 1%
• D) 2%

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Definitions:

Dishonor

The refusal or failure to accept or pay a bill of exchange, promissory note, or other negotiable instrument when due.

Primary Liability

The direct responsibility to pay or compensate for a loss or damage, without the necessity to seek contribution from others.

Cashier's Checks

A check guaranteed by a bank, drawn on the bank's own funds and signed by a cashier.

Capacity

The legal ability of a person to enter into a contract, often determined by factors such as age, mental competency, and legal status.