People Know That the Inflation Rate Will Increase from 3

question 58

Multiple Choice

People know that the inflation rate will increase from 3 percent to 5 percent. As a result

• A) the nominal interest rate is constant.
• B) the nominal interest rate falls by 2 percentage points.
• C) the real interest rate rises by 2 percentage points.
• D) the nominal interest rate rises by 2 percentage points.

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Definitions:

Business Plan

A document that outlines a company's strategy, financial projections, and market research.

Sources And Uses Of Funds

A financial document used by start-up businesses that shows where capital comes from and what it will be used for.

Startup Businesses

Newly established enterprises, often in the early stage of development, focused on bringing a unique product or service to the market.

Capital

Financial assets or the financial value of assets, such as cash and securities, used by a business to fund its operations and investments.