Which of the Following Statements Is Logically Valid

question 76

Multiple Choice

Which of the following statements is logically valid?

• A)If the real interest rate is less than the nominal interest rate, inflation must be zero.
• B)If the real interest rate is less than the nominal interest rate, inflation must be negative.
• C)If the rate of inflation is less than the nominal interest rate, the real interest rate is positive.
• D)If the nominal interest rate is high, the real interest rate must be high.
• E)If the rate of inflation is high, the nominal rate of interest must be low.

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Definitions:

Monopolistic Competitor

A firm operating in a market structure where many companies sell products that are similar but not identical, leading to competition based on product differentiation rather than price.

Elastic Demand Curve

A representation of demand that shows a high sensitivity to changes in price, meaning quantity demanded significantly changes with small changes in price.

Price Discrimination

A strategy in pricing where the same provider sells identical or almost identical products or services for different prices across various markets or segments.

Same Good

A same good refers to an identical product or item that is available across different sellers or markets, maintaining the same characteristics and quality.