Which Statement Best Describes the Relationship Between Inflation and Interest

question 43

Multiple Choice

Which statement best describes the relationship between inflation and interest rates?

• A) There is no relationship between inflation and interest rates.
• B) The interest rate is determined by the rate of inflation.
• C) In order to fully understand inflation, we need to know how to correct for the effects of interest rates.
• D) In order to fully understand interest rates, we need to know how to correct for the effects of inflation.

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