For a Given Real Interest Rate, Which Statement Best Describes

question 146

Multiple Choice

For a given real interest rate, which statement best describes the effects of an increase in inflation?

• A) Inflation makes the real interest rate decrease, which encourages savings.
• B) Inflation makes the real interest rate decrease, which discourages savings.
• C) Inflation makes the real interest rate increase, which encourages savings.
• D) Inflation makes the real interest rate increase, which discourages savings.

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Definitions:

Institutional Value System

The set of fundamental beliefs, ethics, and norms that guide the behavior and practices within an organization or institution.

Exploration

Calls for the organization and its managers to stress freedom and radical thinking and therefore opens the firm to big changes—or what some call radical innovations.

Process Innovations

Introduce into operations new and better ways of doing things.

Institutional Adaptation

The process by which organizations adjust and change to meet the demands of their external environment or internal needs.