When the Inflation Rate Is Zero, the

question 7

Multiple Choice

When the inflation rate is zero, the

• A) real interest rate is greater than the nominal interest rate.
• B) real interest rate equals the nominal interest rate.
• C) nominal interest rate is zero.
• D) real interest rate is less than the nominal interest rate.

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Definitions:

Ownership Utility

The value or benefit that comes from owning a product or service, above and beyond its functionality or use.

Place Utility

The value added to products by having them available at a location where they are needed or wanted by consumers.

Time

A continuous, measurable quantity in which events occur in a sequence from the past through the present to the future.

Sales Contract

A legally binding agreement between a buyer and seller which outlines the terms of sale for goods or services.